BMW to close final salary pensions

BMW is planning to stop 5,000 members of staff making fresh contributions into their current final salary pension schemes, much to the chagrin of UK employees, the Daily Telegraph has learned.

The German car company’s intention is for its UK workforce to pay into a defined contribution pension plan.

Both of its current defined benefit schemes are in deficit – the bigger one stands at £813million, while the smaller one totals £34.8million – with plans to close both to future accrual, by what they call ‘active members’, by June 2017. Workers will be consulted on the changes.

A BMW spokesperson says: “Many UK companies have significant pension fund shortfalls in their defined benefit schemes and the cost and risk associated with these schemes is making them increasingly unsustainable and unaffordable for both members and companies.