Co-op to close its final salary pension scheme

The Co-operative Group has become the latest employer in the UK to close its final salary pension scheme.

The retail and financial services group proposes to change the basis by which payments on its defined-benefit pension scheme are calculated.

From April workers could be transferred to a new scheme where pension payments will be based on their average salary over their career.

A spokesman for the Co-op told the BBC that the changes would make the scheme affordable in the long-term, while still offering staff a “high quality occupational pension”.

The proposals have yet to be finally approved, but have already angered unions. “This is not a good way to start 2006,” said Ron Webb, national secretary for transport at the T&G union.

A few weeks ago Rentokil Initial announced that its existing final-salary scheme members would not be able to accumulate further benefits.

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