UK - BMW has entered into discussions with employee representatives on possible methods to reduce the costs of future service benefits in its UK defined benefit (DB) scheme.

Results of its latest actuarial valuation revealed the scheme - which has 6,100 active members, around 61,800 pensioners and over 20,000 deferred members - has assets of £3.9bn (€5bn) compared to liabilities of £4.4bn, resulting in a deficit of approximately £500m.

As a result of this "significant increase" in costs revealed by the valuation, BMW has entered into discussion with representatives from trade unions on possible solutions to reduce costs.

A spokeswoman for BMW revealed the firm has already agreed a deal with trustees which will see BMW contribute an additional £23.6m a year for 10 years - beginning this summer until 2017 - in an effort to reduce the scheme deficit.

However, she stressed there were no firm proposals on how to deal with the issue of rising costs, as it has only held two meetings with union representatives with further discussions expected to take place "in due course".

That said, BMW emphasised any solution would only affect future service costs, not benefits already accrued under the scheme, and claimed deferred members and pensioners would not be impacted by any potential changes to scheme funding.

The spokeswoman added: "We have only just begun discussions on how to deal with the increases in pension costs. There are no firm proposals at this stage. But when we have any firm proposals we will put them out to full consultation."

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