UK - The pension shortfall at defence and aerospace giant BAE Systems jumped by £500m in the first half of this year to £2.6bn.
The shortfall under the accounting standard FRS17 increased after the schemes’ actuary Aon Consulting revised mortality assumptions.
The changes in the schemes’ life expectancy assumptions also mean that BAE’s pensions costs - under the SSAP24 accounting standard - rose from £28m to £82m during the first six months.
The UK-based £4.5bn BAE Pension Scheme is made up of seven funds offering final salary and defined contribution provision.
In April the company introduced a hybrid scheme for new employers made up of a defined benefit core with a DC overlay.
Last year, the group agreed to take on 60% of the contribution costs to the UK pension schemes in a bid to help mitigate its growing costs. It had originally planned to split the burden with employees.
The arrangement will be reviewed again after a further evaluation later this year.
The group reported overall interim losses of £296m after £688m of goodwill amortisation and asset impairment charges from the group’s previous acquisitions.
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