TRW Automotive is considering freezing the company’s £3.3 billion ($5.4 billion) TRW Pension Scheme, Birmingham, England, and replace it with a defined contribution plan for all employees, according to a company spokeswoman.
The DB scheme was closed to new members as of April 1. It had a deficit of about £440 million in January, the latest data available.
“Our proposal is to close the scheme to future benefit accruals in order to focus on ensuring that we can honor commitments related to all contributions received and benefits accrued to date,” Roy Middleton, secretary of the trustee board for the TRW Pension Scheme, said in a statement. “Like all pension schemes, we face the challenges of escalating liabilities due to reduced returns on investments and the positive fact of longer life expectancy,” Mr. Middleton added.
TRW officials will discuss the proposal with employees until Sept. 30, and a final decision is expected soon after that.