Balfour Beatty today announced that it has reached an agreement with the trustees of its pension fund, as plans to meet the huge deficit were drawn up. With the last recorded accounting deficit in June showing a shortfall of over £430million, trustees have clearly been concerned about where the money will come from.
The agreement, which comprises a one off payment of £40million by the end of the year, and subsequent annual payments of £48million, will pay off the deficit in 8 years.
The agreement also allows for inflation as all payments are due to rise in line with the consumer prices index (CPI) up to a maximum of 5%.
This isn’t the first agreement that has been set up to clear the shortfall. In 2008 Balfour Beatty agreed to pay payments of £24million a year, due to clear the deficit by 2013, and this payment was increased to £36 in 2010.
The infrastructure group, which is a market leader in construction and support services operates worldwide and employs over 50,000 staff. The pension fund is now closed to new members as, like many companies, Balfour Beatty have found this form of staff benefit to be unsustainable.