The CIPD has warned employers to think carefully about closing final salary
pensions schemes after Marks & Spencer became the latest large company to
ditch its scheme.
Mike Emmott, employee relations advisor at the CIPD, believes that defined
benefit schemes are often seen as a major part of reward packages and are
important in recruiting and retaining staff.
"The development of the occupational pension scheme has been one of the
real successes of post-war Britain," he said.
"We would urge employers to think long and hard before closing down
existing arrangements and seek alternative ways of funding them – for example,
raising employee contributions."
Retail giant M&S is to close its final salary scheme to staff recruited
after 1 April.
New employees will be able to join a defined contribution arrangement that
will be contracted in to the State Earnings Related Pension Scheme.
John Peachey, head of group pensions, defended the move, claiming the new
pension plan would still be competitive.
"The new flexible scheme is more appropriate for today’s business
environment.
"It will allow employees, with the support of the company, to take
ownership of their final pension by deciding how big a commitment they are
prepared to make," he said.
