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The Actuary The magazine of the Institute & Faculty of Actuaries

Pension deficit at BAE Systems

As we went to press, news emerged of an agreement between employer BAE Systems and unions representing its employees on a strategy to eliminate its defined benefit pension scheme deficit of £3.1bn. The plan involves sharing of the burden 60% by the company (in the form of increased regular contributions and total special contributions of £1.1bn) and 40% by employees (through a combination of higher contributions and reduced benefits. The plan also includes agreement on sharing of the burden of future increases in longevity. Unions praised the consultation process pursued by BAE, which may become a benchmark for others. More detail at www.baesystems.com.