BAE Systems PLC, Farnborough, England, may close its pension plans to new members upon completion of an internal review, the company confirmed today. Its seven defined benefit pension schemes have £9 billion ($13.9 billion) in total assets. According to broker estimates, the firm’s pension liabilities have grown to £1.3 billion, up from £445 million at the start of the year.
Company spokesman Richard Coltart said the review, assisted by Jardine Lloyd Thompson Benefit Solutions, is expected to result in one of two options: closing the schemes to new members and replacing them with a money purchase plan, or dramatically restructuring the existing schemes to reduce pension liability cost. That option could include moving from the final salary status to other forms of benefit calculation, or raising the contributions required from members.
