Rolls-Royce has started talks to close all its final salary pension schemes to new members and proposed making a £500m ($876m) lump sum payment and raising the level of its annual contributions by an unspecified amount.

The UK aerospace company ranks among those FTSE 100 companies with the largest pensions shortfall relative to their market value. Rolls-Royce said on Thursday that its three UK schemes were in deficit to the tune of £1.3bn at the end of December.