Directors of Rentokil Initial were described as “vermin” yesterday after announcing plans to scrap the final salary pension scheme for existing employees.
The attack, made by Derek Simpson, the general secretary of the Amicus union, came as pension experts predicted that the security and pest control services firm was likely to be the first of many companies to cut their existing pension arrangements over the coming months.
Ros Altmann, a government pensions adviser, said that many businesses could no longer afford to honour their final-salary pension promises.
“You have to ask yourself: ‘Is it better to keep pretending they can afford this kind of pension provision or is it better to face the fact they can’t?’ [Rentokil] will be the first of many. I’m amazed the likes of British Airways and BAE haven’t done it so far – they will never be able to honour their pension benefits in full.”
Simpson said it was vital for employees to ensure the company they work for recognises the importance of unions.
“Only an anti-union company like Rentokil would be able to get away with taking a long pensions holiday, only ending last year, and then move immediately to close its pensions scheme to existing members. It has behaved like the vermin it is paid to extinguish,” he said.
The TUC’s general secretary, Brendan Barber, warned: “Employees in other companies should seek reassurances that their employers do not have similar plans.”
The GMB said it was considering legal action and seeking an immediate meeting with management.