Bentley Motors is launching a consultation on 19 February about closing its defined benefit (DB) pension scheme, as the funding of the plan has increased by 50 per cent in the past five years.
The proposal will affect the 1,200 members of the Rolls Royce and Bentley Pension Fund – which protested against these changes outside of the luxury carmaker's headquarters in Crewe this week.
The scheme, which closed to new members in 2012, has a deficit of over £500m, a spokesperson at Bentley told FTAdviser.
He said: “Although entering into a consultation is not an easy step to take, no decisions have been made at this stage.
“While all member accruals to date are secure, the ongoing level of financial risk is unsustainable.”
According to the spokesperson, the proposal will affect 28 per cent of the company workforce – workers which are still accruing benefits in the DB scheme, while the remaining employees are enrolled in a defined contribution (DC) plan.
He said: “We want to find and agree the best possible outcome for the company and all of our colleagues.”
The spokesperson that besides the scheme deficit, the company decided to launch this consultation now because it wants to ensure that all aspects of the business are prepared for the future.
He said: “It is essential that we are in a strong position to invest in new products and technologies, like electrification, to help maintain our future competitiveness.”
Bentley follows the examples of other companies, which are closing their DB schemes due to growing costs.
This is the case of Royal Mail, which will close its final salary plan to future accrual on 31 March 2018, as the company reached an agreement in principle with its trade union to create a new collective defined contribution (CDC) scheme for all employers.
The Universities Superannuation Scheme (USS), the biggest private DB plan in the country, is now facing industrial action after plans to transform the fund in a full DC plan.