On 20 February 2020 the Trustee of the BAE Systems Pension Scheme (‘the Scheme’) announced that agreement had been reached with BAE Systems plc (‘the Company’) on the detail of an actuarial valuation for the BAE Systems Section (‘the Section’) as at 31 October 2019. This earlier than scheduled actuarial valuation was undertaken following a proposal from the Company to accelerate deficit recovery contributions by making a £1bn payment into the Section in the coming months.
The Trustee of the Scheme is pleased to report that on 17 April 2020 the £1bn payment was received from the Company. This payment represents an acceleration of deficit contributions that would otherwise have been payable in the period 2022 to 2026. The positive impact that this contribution has made in terms of security for all Section members benefits is very welcome. A further £250m of deficit funding is also due to be paid by 31 March 2021, in accordance with the Schedule of Contributions agreed after the 2017 valuation.
The approach to be taken for the investment of this money has been agreed between the Trustee and the Company and it supports the journey plan which is set out in the Scheme’s Statement of Investment Principles.
The Trustee will be closely monitoring the investment of this £1bn contribution, as it does all Scheme investments.
As previously advised the Airbus Section of the Scheme is unaffected by this development. The next actuarial valuation for that section is currently in progress based on an effective date of 31 March 2020.