UK - Telent - the former Marconi telecoms group owned by Pension Corporation - has agreed a 15-year funding plan with trustees in a bid to shore up its pension scheme.
In a statement, Telent said it would contribute a minimum of £4m (US$6.7m) a year into £2.5bn GEC 1972 (Pension) Plan and progressively pay £500m from the escrow account, established following the firm's takeover by Pension Corporation in 2007, into the fund.
It said it would also establish a new escrow, funded by Telent, for the duration of the funding plan - and noted the shareholder, Pension Corporation, will not take a dividend until at least 2013.
Telent said its was also consulting on proposals to close the scheme to future accruals in a bid to bring certainty to future pension costs. The plan was closed to new employees in April 2007.
It said it was entering into a period of consultation with its UK Employee Forum and
with trade union Unite on the proposal to close the plan to future accrual after April 5 next year and replace it with a new defined contribution scheme.
Telent said the consultation period will end on February 22 and the proposals would affect around 1300 employees.
It said, by 2023, the end of the 15-year period, the combination of expected investment returns and Telent's additional contributions should ensure the plan is fully funded, sustainable and secure.
Telent chief financial officer Heather Green said: "If implemented following the consultation process, closure of the GEC 1972 Plan to future accrual, together with the agreement to secure the pensions already built up, will ultimately strengthen the position of the GEC 1972 Plan whilst allowing Telent to continue to maintain and grow a sustainable operating business.
"I believe this represents the best way forward both for the security of the GEC 1972 Plan, and for the business."
Pension Corporation said it welcomed the agreement which it believed increases the security of the 56,000 members' benefits.
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