Vodafone is planning to close its £755m final salary pension scheme to roughly 4,000 of its employees, it emerged today.
The mobile phone operator sent a letter to staff this week informing them of a consultation exercise, ahead of a planned closure of the defined benefit scheme in April, reports the Financial Times.
The company said it was making the move because of the rising cost of defined benefit pensions, but added that it plans to “substantially improve” the defined contribution pension programme.
“This will result in pension benefits that are fair to all employees, sustainable in the long term and affordable for employees and the company,” Vodafone said.
On 31 March the assets of Vodafone’s defined benefit scheme had a £60m shortfall against its liabilities of £815m.
Vodafone joins other large employers, such as Barclays, Fujitsu and Whitbread, in closing final salary schemes to existing staff.