GKN unveils plans to reduce final salary pension deficit

GKN has unveiled a plan to reduce the future funding liabilities of its open defined benefit (DB) pension scheme by an estimated £80 million.

The automotive and aerospace parts maker has agreed to create an asset-backed cash payment scheme, which will see £30 million per annum going into the pension fund for 20 years. This arrangement has been valued at £331 million.

In the event of the scheme having a funding surplus in the future, the cash injections will be put towards annual ongoing scheme service costs.

The changes have been agreed with the scheme’s trustees and members.

GKN will provide a further update on pensions when its interim results are announced on 3 August.

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