Final salary pension attracts jobseekers

The
head of personnel at food supply company Northern Foods says the company’s
decision to retain its final salary pension scheme will help recruit and retain
staff in a tough industry.

The
company reviewed pensions earlier this year, and looked into alternatives, but
head of personnel Chris Edley said retaining the scheme was the best option.

"We
were going to do what everybody else has done," he said, "but we felt
uncomfortable with it as our business has a history of good schemes."

Northern
Foods, which supplies ready-made meals to supermarkets, will continue to pay an
amount equivalent to 10 per cent of its employees’ salaries into the group’s
contributory scheme, but, to ensure the scheme’s viability, staff are now being
asked to increase their personal contributions from 5 per cent of pay to 7 per
cent.

Edley
said the change was fully supported by the four major trade unions with which
the company deals, and just 5 people out of the 10,000 members decided not to
continue in the scheme.

"I
think it will give us an advantage as labour is not easy to come by in the food
industry," he said.

Last
month, car giant Ford announced it had decided to pay more into its final
salary pension scheme. However, the list of UK employers abandoning this form
of pension – preferring cheaper plans that transfer the investment risk to the
employee – is growing by the week, with British Airways, BT, Marks &
Spencer, Dixons and KPMG all closing their final salary schemes to new employees.

The
director general of the British Chambers of Commerce David Frost warned that
the Government’s review of the pensions tax regime must be used to reverse this
trend.

By Quentin Reade

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