UK - BAe Systems' seven final salary schemes will be either closed to new members or modified following a review due next month.
A spokesman for the aerospace engineer confirmed that leaving the seven schemes – which are valued at approximately £9bn – unchanged was not an option.
He disclosed that two options have been tabled.
- Shutting the current schemes and opening a new scheme for all employees which could either be a money-purchase, final salary or a combination of both.
- Keeping the existing schemes open for current members and taking action to control costs, while opening a new scheme for new employees which would also be either money-purchase, final salary or a combination of both.
The spokesman added: “The review is looking at the long-term sustainability of the maximum benefit to all parties.”
It was revealed in September that the company has seen its FRS17 pension deficit rise by nearly £900m to £1.3bn since the beginning of the year.
The company’s seven schemes had a net FRS17 deficit of £455m at the start of the year but by the end of June it had grown by an additional £845m.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers