13th Jun 2006 11:25
BAE SYSTEMS PLC13 June 2006 BAE Systems completes revised UK pension funding arrangements 13 June 2006 BAE Systems has completed a programme of measures to address the £3.1bn fundingdeficits in its principal UK pension schemes. In the accounts published for the year ended 31 December 2005 the company had atotal pre-tax pension deficit of £5.3bn, as defined under the IAS 19 accountingstandard and £4.1bn net of allocations to equity accounted investments. The IAS19 deficit of £5.3bn, was estimated to have reduced to circa £4.2bn as at theend of May 2006 on an unaudited basis. At the latest valuation dates the aggregate of deficits across the fourprincipal UK schemes, prepared for the purpose of setting cash contributions,was £3.1bn. Addressing the funding deficit in these schemes has been achieved through acombination of measures shared between the company and employee scheme members.Annual contribution rates have been increased for both employees and thecompany. In addition, employees have agreed changes to benefits to reducefuture liabilities and the company has agreed additional one-off contributionsof cash and assets to the schemes. The revised funding arrangements include one-off contributions by the companytotalling £1,087m comprising the transfer of assets and cash. £661m will becontributed in 2006 with the balance over 10 years. The cash contribution in2006 will be £181m. The result of these changes is an affordable solution that retains the valuableand highly regarded defined benefit pension arrangements for those employees whowere offered such terms when they joined the company. Commenting on the completion of the new funding arrangements Mike Turner, ChiefExecutive BAE Systems plc said: 'Pension scheme funding has been a challengefor the company but I am delighted that we have now completed these revisedarrangements through the constructive approach of all concerned. We have workedin close consultation with our Employees, Trades Unions and Scheme Trustees todevelop pension arrangements acceptable and affordable to both the company andits people.' Issued by: BAE Systems plc London Investor enquiries: 44 (0) 1252 383730 Media enquiries: 44 (0) 1252 384719 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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