# BAE Systems reaches agreement with the Trustee Board for pension funding

- Link: https://www.directorstalkinterviews.com/bae-systems-reaches-agreement-with-the-trustee-board-for-pension-funding/412806057
- Published: 2020-02-20T07:38:55+00:00
- Author: Amilia Stone

**[BAE Systems plc](https://www.directorstalkinterviews.com/ftse-company/bae-systems-plc/ba.l)**(
LON:BA) today announced that, after consultation with The Pensions Regulator in 
the UK, it has reached agreement with the Trustee Board of the combined scheme on
the accelerated funding valuation and revised deficit recovery plan.

In October 2019, six of the Group’s nine UK pension schemes (including the two largest
schemes) were consolidated into a single scheme.

Following that consolidation, the Company agreed with the new Trustee Board to bring
forward the funding valuation of the combined scheme to 31^(st) October 2019 from
the previously scheduled date of 31^(st) March 2020.

At the 31^(st) October 2019 funding valuation date, the deficit was £1.9bn.

The current deficit recovery plan which runs to 2026 will be replaced by a new deficit
recovery plan.

Under that revised plan:

·    A one off payment of £1bn is to be made in the coming months – this will be
debt funded.

·    In addition, c.£240m of funding is payable in the scheme year ending 31 March
2020 and c.£250m by 31 March 2021, in line with existing commitments.

For completeness:

·    The three smaller UK defined benefit schemes will conduct their triennial review
on 31^(st) March 2020, currently these schemes are in a surplus.

·    Deficit contributions into the Group’s US schemes are expected to be $80m in
2020 and $40m pa for five years thereafter.

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