The UK government has long sought to phase out the sale of new gas-powered vehicles, passing legislation that mandates a switch to zero-emissions vehicles in the coming years. Thus far, consumers haven't quite gravitated toward EVs at expected rates, however, which has left automakers like Ford in a bit of a bind - and unable to meet stair-step goals. Despite this and a £1 billion ($1.3 billion USD) export development guarantee from the UK Export Finance (UKEF), Ford is still looking to trim around 800 jobs in that country in the coming years.
Those cuts are expected to largely stem from administrative or product development roles, as well as voluntary retirements at sites including Ford's research and development center in Essex, the company's UK headquarters, and its parts distribution center in Daventry. Now, Legal & General has reached a deal with FoMoCo and will take over £4.6 billion (around $6.1 billion USD) of pension liabilities from the automaker, covering the retirement savings of roughly 35,000 workers, according to the Financial Times.
This new deal is being spread across two Ford UK pension programs - the Ford Hourly Paid Contributory Pension Fund and the Ford Salaried Contributory Pension Fund. For retirees falling under these programs, the benefit of such a deal is gaining a bit of extra security in their retirement income, regardless of whether or not their past employer experiences any sort of financial difficulties - which is precisely why these kinds of buyouts are becoming more and more common.
“Pension-risk transfer is our biggest business - it’s really important to us to show that we can operate in what is a very competitive market to secure this” said Andrew Kail, chief executive officer of institutional retirement at L&G. Jonathan Wood, chair of the board of trustees for Ford pensions, added that he's “delighted to have achieved this significant further de-risking milestone, providing even greater security for our members, having worked on the deal for many years."
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