UK - BAE Systems will injecting £1.1bn into its pension fund under a revised funding plan in an effort to tackle its £3.1bn deficit.
Over 2006, the company will be contributing £661m to the fund - £181m in cash and the rest a mixture of property and other assets owned by the company that will be transferred to the pension scheme balance sheet.
The total £1.087bn contribution will be spread over a period of 10 years and has been announced as a revised arrangement to eliminate the pension fund’s substantial deficit.
This decision could only be announced once the agreement was finalised. The company was bound by a promise made in February to talk through any agreements with its employees.
Over the next 10 years, employees’ contributions will also be increased with the aim of fighting the pension fund’s deficit.
A BAE spokesperson was quick to point out that the sum employees will be contributing will not match that made by the company over the same period of time.
The company will be shouldering around 60% of the deficit burden while the employees will be accounting for the other 40%.
The company last week sold its 20% stake in Airbus to the plane maker's majority owner, EADS. The BAE spokesperson noted that the resolution to tackle the deficit was in no way connected to this transaction.
By Angele Spiteri Paris
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