UK - Engineering company GKN looks set to increase contributions from £18m to £20m into its ailing £1.5bn pension fund this year.
According to GKN’s final financial results for 2002, the boost in contributions is to stem the scheme’s gross FRS17 deficit £551m, although lower than its December 2002 figure of £650m.
The exact size of the increased contributions cannot be calculated until the fund’s formal actuarial valuation next month.
GKN’s results state: “Recognising that in the short-term at least, some of this deficit is unlikely to be made up simply through the recovery in asset values, the group has already been making higher payments into this fund.”
Its UK pension scheme has 60,000 members, but only 10% are currently contributing, with the rest being deferred members or pensioners.
In August last year reports indicated that GKN was considering closing the final salary scheme to new members in a bid to freeze rising liabilities, but this is now unlikely to happen until after the valuation.
Last month GKN was one of several companies advised by Standard & Poor’s to close its final salary scheme in order to avoid the risk of having its credit rating downgraded.
*Automotive services group Inchcape has also revealed that it will increase contributions into its UK defined benefit scheme, which undergoes a review next month.
The company will be increasing its pension charge for 2003 from £3m to £4m, despite the company expecting a recovery in the value of its pension scheme assets.
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