UK – Defence firm BAE Systems has announced that it will be injecting 90 million pounds (132 million euros) into its pension schemes over the next two years as a result of shortfalls.

Using FRS17 accounting standards, BAE Systems reports that as of 31 December 2002, its shortfall in post retirement asset when compared to respective liabilities was 2.164 billion pounds (3.18 billion euros), only slightly less than that the 2.59 billion pounds deficit estimated by Credit Suisse First Boston in its report at the end of January.

Thirty million pounds will be injected this year and 60 million will be injected in 2004.

BAE has come under increasing scrutiny due to estimations that it has one of the largest pension deficits in relation to market capitalisation of all FTSE 100 firms. BAE has four principal UK schemes and two US schemes, and reports that the company may be forced to close some have surfaced in the UK press.

The UK Transport and General Workers' Union has asked BAE Systems to withdraw the threat to final salary pension schemes – especially given that profits of 796 million pounds were announced by the firm today. T&G National Organiser Jack Dromey said today: "Part of the profit should be invested in pensions to honour past pledges of security and dignity in retirement for BAE's 57,000 UK employees."

Crunch talks are planned next Tuesday with BAE. Dromey added: "The mood of our members is unmistakeable. They will take industrial action to defend their pensions rights."

The long-term ratings of BAE was placed on credit watch by Standard and Poor’s in January.