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German car giant BMW is on a collision course with its UK workers over plans to  stop  5,000 employees from making fresh contributions to its two gold-plated final salary pension schemes, the Daily Telegraph has learnt.

In a blow to employees, it has emerged that BMW wants all its UK staff to start paying into a less generous defined contribution (DC) pension plan, which it launched in 2014 and already has about 2,000 members. It plans to close its two defined benefit schemes (DB) to future accrual by so-called active members at the start of June next year and will consult with workers on the changes.

Both are in deficit. The bigger DB scheme had an estimated deficit of £813m at the end of 2015, while the other had a £34.8m shortfall.

Unite, the union, immediately declared last night that it would oppose BMW’s proposals.

The car manufacturer has already shuttered the DB schemes to new members to cut costs. Its smaller scheme was closed thirteen years ago while the larger plan was shuttered in 2013.

DB schemes promise to pay retirees a set income linked to their wages and number of years of employment. However, such plans have increasingly become unaffordable for many companies and have been scrapped in favour of DC schemes, where pension income is dependent on the amount saved as well as investment performance.

A BMW spokesman said: “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.

“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 maintain the cost competitiveness of the UK as a manufacturing base.”

Tony Murphy, of Unite, 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.”

Unite has called meetings on Tuesday 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.

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