BAE Systems reaches agreement with employees to eliminate pensions' deficit

BAE Systems reaches agreement with employees to eliminate pensions' deficit

	Published : Wed, 14 Jun 2006 13:50 By : James Rowe Print this Story

LONDON - UK's biggest aerospace and weapons company, BAE Systems, announced today that it has chalked out a plan to take care of its huge pension fund deficit.

At the end of last year, the deficit was pegged at £3.1 billion. BAE said that it would pay an extra £1.1 billion over the next decade in an effort to wipe out the deficit. The company and the staff are also paying higher contributions regularly to help tide over the crisis.

"Pension scheme funding has been a challenge for the company but I am delighted that we have now completed these revised arrangements through the constructive approach of all concerned," said Mike Turner, the chief executive of BAE Systems. He added that the new plan was acceptable as well as affordable.

Yesterday the group had reached an unique deal with the unions that would see the transfer of property assets and would also have workers working longer in keeping with the increased life expectancies. The group also transferred the deeds of its 351-acre site in Samlesbury to pension funds as a part of its £1.1 billion payment.

"I can confirm that the property deeds have been transferred outright to the schemes. The Pension Scheme Trustees now do own the properties outright," a company spokesman said. "The terms of the relationship are all agreed as part of a commercial lease agreement, as you would expect. The properties have already been transferred earlier this year."

Staff members at BAE have already voted for this plan. "The strength of the BAE Systems agreement lies in the way they conducted the consultation process," said John Wall, the general secretary of the Confederation of Shipbuilding and Engineering Unions. "We were all involved in helping develop the solution and had full visibility of the information ... I would like to see more companies take this lead."