Engineering organisation GKN has closed its UK defined benefit (DB) pension arrangement to future accrual.
The DB scheme closed to future accrual following a consultation with active members. As of 1 July 2017, members will receive pension benefits on a defined contribution (DC) basis.
GKN operates a number of DB and DC schemes across the group. This includes two UK DB schemes, GKN2 and GKN3.
The 2016 triennial funding valuations are currently underway for both UK DB schemes, with the valuation for GKN2 nearing completion.
GKN plans to make a £250 million lump sum payment into its GKN2 DB scheme in the second half of 2017 in order to address the pension deficit.
Discussions with the pension trustee for GKN3 are ongoing.
The organisation’s UK pension deficit fell from £1,221 million at 31 December 2016 to £1,063 million at 30 June 2017.
GKN’s cash contributions to its various DB scheme and historical retiree medical arrangements totalled £70 million across the group, compared to £71 million in 2016. The income statement charge for its DC pensions was £32 million in 2017, compared to £28 million in 2016.
Nigel Stein, chief executive at GKN, said: “We made progress in the first half and are on track for the full year. We are performing well against our key markets, demonstrating once again the strength of our businesses, strong market positions and leading technology. We continue to invest for growth and have made significant progress to address our UK pension deficit.”