Cadbury Schweppes has defended dropping its final salary pension scheme for
new starters, but admits a move to a flexible plan has failed to interest
existing staff.
Pensions and global share plan director John Hatchett, said he was
disappointed that only 46 existing staff have changed to the company’s new
flexible pensions scheme.
Last year the confectionery company scrapped its final salary pension plan
for new starters and replaced it with a more flexible average salary scheme –
which it extended to all employees this summer.
Under the new plan, staff have a choice of contributing between 2 and 4 per
cent which they can adapt annually. Retiring workers can also decide what
percentage of their pension is relinquished to a partner – under the old scheme
it was set at 50 per cent.
The company claims the move benefits the majority of its 7,500 UK-based
staff who work on the shopfloor and will not retire on their highest career
salary, as their income drops at the end of their career due to less hours
worked.
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Hatchett told delegates at Employee Benefits magazine’s conference last week
that he changed the pension scheme because it did not fit with the firm’s
objectives.
"We increasingly want people to work flexible hours, seasonal
contracts, and fewer hours as they reach retirement. But they wanted to keep
working to keep pay levels up, to have a higher final salary," he said.
