UK - Bovis Lend Lease has confirmed it is proposing to close the final salary scheme of the UK Bovis pension scheme on the basis that the costs of the fund are "no longer sustainable".
Lend Lease acquired Bovis in 1999, but the Australian property group has now announced "following extensive reviews of its final salary section (FSS) pension scheme, Lend Lease has announced that it is proposing to close the final salary section of the Lend Lease UK pension scheme".
Figures from Lend Lease's half-year results to December 31 2008 showed the Bovis UK defined benefit (DB) scheme had assets valued at AU$664.2m (€407.2m), but liabilities of Au$751.4m, resulting in a deficit of AU$149.1m (€91.4m).
As a result, Bovis Lend Lease confirmed "the business proposes to move existing active members of the final salary scheme into a career averaged salary scheme, which is linked to members' earnings throughout their whole career".
However a statement from the company claimed it plans to offer members of the DB scheme "an additional top-up specific to each individual" although the company declined to comment further on the exact changes to the scheme or how the 'top-up' would work.
"Like many businesses, Lend Lease believes these changes are necessary because the costs of a final salary scheme are no longer sustainable," said Lend Lease in a statement.
"Making the proposed changes will create more certainty for the organisation in the future," it continued.
Bovis Lend Lease confirmed a formal 60-day consultation is now underway, among active members of the scheme and an employee pension forum, which is intended to represent the views of final salary scheme members across the entire company.
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