The most recently available annual report for the year ending 31 December 2009 now indicates that the deficit in the scheme is about £233M and the scheme funding level is 80%. The true deficit will be revealed in 2011 when the three yearly full actuarial review for the year ending 31 Dec '10 will become available. (Several years ago the fund was said to be in surplus - click here to see how this surplus was dissipated.)

The recovery plan introduced in April '06 requires that the Company pays an increased contribution rate based on the payroll and additional £1.54M per month for the next 10 years.

The plan now in place involves: -

The Trustees agreed these proposals because they involve cash payment over a shorter time than the interim plan. The employee members were balloted and of the TU members, 882 voted in favour of the benefits changes and 324 voted against. The non-union members voted 281 for and 173 against.

The interesting statistic is that the TUs at that timerepresented only 7% of the 16,325 scheme members and only 72% of the employee members. Why then should they alone have had the last word on the funding measures for our Scheme?

BAE Systems has an estimated total deficit for all its pension schemes of over £5.5 billion.

In a move simply designed to save money the Government decided to change the method of indexation of pensions from the RPI to the CPI. Although ours is a private as opposed to a public pension scheme BAE Systems has refused to allow the RO pensions scheme to retain RPI indexation. See:

1 Our initial letter to the BAE Chairman, Dick Olver
2 The response from the Pensions Manager, Tinsley
3 Our second letter to Olver
4 The response from HR Director, Imrie

Finally see the differences between the RPI and CPI and also ROPA's response to the DWP's consultation on the CPI switch.