GKN PLC froze its two U.K. defined benefit funds, the global engineering business said in a news release Wednesday.
The freeze, made after discussions with the affected employees and unions, was effective July 1, a GKN spokeswoman said. Plan participants have been transferred to the company's defined contribution plan. An asset size for the DC plan was not available.
The total net asset value for the pension funds is £2.5 billion; a breakout was not immediately available.
GKN intends to pay a contribution of £250 million ($325 million) to one of the funds, GKN2 Scheme, in the second half of the year to address the deficit and reduce future deficit recovery payments, the firm said in a statement. The combined accounting deficit for the frozen pension funds stood at £1.06 billion.
GKN overall "made progress in the first half and are on track for the full year. ... We continue to invest for growth and have made significant progress to address our U.K. pension deficit," Nigel Stein, CEO of GKN, said in the news release.