Travel agency Thomas Cook has finally shut its final salary pension scheme by closing a loophole that allowed existing staff to opt in.
The company closed the scheme to new employees in April 2003, replacing it with a defined contributions scheme.
However, Thomas Cook has now closed it to staff who have been at the company for more than three years but who had not previously joined.
A company spokeswoman told Personnel Today’s sister title Travel Weekly that staff had been given three months’ notice. She would not reveal details of the replacement scheme, because it is undergoing an audit that could lead to changes in contribution levels.
Travelcare, part of the Co-operative Travel Trading Group, also scrapped its final salary pension scheme this month, replacing it with a career average earnings scheme. Employees contribute 6% and Travelcare contributes 16% of their salary.
Thomson is the last of the large travel employers to offer a final salary scheme. After a year, shop managers can join – contributing 5.5% of their salary and the company 20.35%. Agents can chose 2% or 4% contributions to a retirement savings plan with the employer contributing 1.5%.
Rick Justham, travel negotiator at the Transport Salaried Staff’s Association, said employers in the sector should improve pensions.
“Employers have a duty to their staff and we will encourage them to take pensions more seriously. Pensions are doubly important for low-paid staff – saving for retirement is even more relevant,” he said.