Rising deficit leads GKN to scrap final-salary pensions | Business

The automotive and aerospace parts maker closed the schemes after consulting with staff, avoiding the industrial action seen at other companiesGareth Fuller/PA

GKN has become the latest big company to scrap its final-salary pension schemes.

The automotive and aerospace parts maker closed its defined-benefit retirement plans — often referred to as final-salary schemes, as pension payments are calculated as a proportion of an employee’s earnings — at the start of this month.

It has pledged to immediately raise £250 million to help to plug a £1 billion deficit in a scheme that has liabilities calculated to be £3.4 billion.

GKN’s decision comes after an agreement for the closure of another big final-salary scheme for British employees of BMW, but not before a spate of strikes at the German carmaker, which hit the Mini factory in Oxford and the Rolls-Royce Motor Car plant in Goodwood, West Sussex.


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