British aircraft engine maker Rolls-Royce is to inject half a billion pounds into its staff pension plans but will also close its final pension scheme to new employees, news agencies have reported.
The leading UK engineering firm said it is looking at pumping GBP500 million into its three pension schemes as a measure to reduce the GBP1.28 billion shortfall its staff are currently facing. The company also pledged to increase its contributions.
However, Rolls-Royce will also close off the remaining final salary pension schemes it is running. The company currently has 21,373 active members in three pension plans. Rolls-Royce closed one final salary scheme to new members seven years ago and now, according to reports, plans to shut down the other two.
If staff agree to the changes, new employees will instead join a money-purchase pension scheme.
These payments will depend primarily on the members of the schemes accepting closure of the final salary pension schemes to new members and a change of investment strategy to achieve progressively a better match between assets and liabilities, the company said in a statement reported by the BBC.