Car manufacturer BMW is planning on closing both of its final salary defined benefit pension schemes, it has confirmed.

The German car maker is to launch a consultation, which will run until 26 September, on its plans to close both schemes to future accrual from 1 June 2017. There are around 5,000 members of the schemes collectively.

The company has proposed that existing members of the DB scheme will join a DC scheme, which already has around 2,000 members and was launched in 2014 for new starters.

“Many UK companies have significant pension fund shortfalls in their defined benefit schemes and the cost and risk associated with these schemes is making them increasingly unsustainable and unaffordable for both members and companies,” a BMW spokesperson said.

“BMW Group has always prided itself in providing excellent pensions for its staff and wants to act now to protect future pension provision for all its staff and to help protect the cost competitiveness of the UK as a manufacturing base. The company is now consulting with its employee representative bodies on this proposal.”

However, union Unite has said it will fight “tooth and claw” to prevent the schemes from closing. It has called meetings today, 27 September, of both the pension committees and shop stewards’ committees at all four BMW sites - Oxford, Swindon, Hams Hall, Coleshill in West Midlands and the Rolls Royce site in Chichester, West Sussex.

Unite is also planning to hold a consultative ballot to gauge members’ opinions during the 60-day consultation to show the company the union intends to fight this plan by whatever means possible.

Unite national officer for the automotive industries Tony Murphy said: “It is clear that our members will be losing thousands of pounds a year in retirement incomes, if this proposal is allowed to go ahead.

“This is plainly unacceptable and Unite will be fighting this proposal tooth-and-claw. It is becoming increasingly too easy for highly profitable multi-national companies to energetically salami-slice workers’ pensions in pursuit of even greater profits.

“BMW is blaming both the increase in national insurance payments and the cost of future liabilities as to why the final salary pension has become unaffordable, although, ironically, profits are still rising in the last two quarters.”

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