Balfour Beatty has reached an agreement with the trustees of its pension fund to eliminate its £375 million funding deficit within eight years.
The contractor will make a one-off payment into the fund of £40m before the end of this year and yearly contributions of £48m from 1 April 2010 over the next eight years.
The £375m funding deficit was revealed in the fund’s three-yearly valuation as at 31 March 2010.
A statement from the firm said: “In expectation of reaching an agreement, we have been making increased contributions since 1 April 2010 amounting to £36m on an annualised basis.”
The annual contributions will increase each April by inflation as measured by the consumer prices index, up to a maximum of 5 per cent, plus half of the percentage increase in the group’s dividend above that rate.