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.