Dairy Crest today became the latest company to close its final salary pension scheme to existing members.
The move, which comes at a time when politicians are investigating ways of restoring a link between earnings and pensions, follows similar action by a number of the UK’s biggest companies, including Barclays Bank, Morrisons and the UK arm of IBM.
Employees that have contributed to the scheme will now transfer into the less generous defined benefits scheme, which is offered to other staff. The move will affect 3,500 of the milk producer’s 8,000 workforce.
Chief executive Mark Allen said it was impossible to quantify how much the move would save the company as it has not taken soundings on how many employees will sign up to the defined benefits programme.
“The move is about de-risking the business. All our moves in the last six months have been about taking risk out of the business and we simply cannot have an open-ended commitment to final salary pensions, especially in an environment where funds narrow or widen, almost on a daily basis,” he said.
Mr Allen confirmed that the company’s executive management, who are members of a different pension scheme, he would also be subject to the change, adding that the defined benefits programme was generous.
The group’s pension fund already faces a deficit of more than £63m, which is expected to jump up when it is valued by actuaries for the group’s financial year end in April. The final salary scheme has been closed to new members since 2006.
Diary Crest also said that heavy marketing investment, including using formal Sex Pistol Johnny Rotten to help advertise its Country Life brand, had helped growth across all its products in the six months to 30 September.Reuse content