The Whitbread group is set to reduce its pensions bill by
closing its £1.2bn salary-linked scheme on New Year’s Day and offer new
employees the choice of a purchase scheme or stakeholder pension.
The group hopes that this will reduce company contributions
to as little as 3 per cent of salary – down from 10.9 per cent under the
current scheme.
None of the 40,000 members in the existing scheme will be
affected, and the options will only be offered to new recruits.
Whitbread spokesman, Jeremy Probert, said, “A money purchase
scheme is more suited to our company simply because we have a lot of young
workers and people who are not transient, but who don’t necessarily stay
forever.
“It mirrors the changing working patterns of the industry
and the changing face of the company itself.”
The measures have also been introduced in response to tough
FRS 17 accountancy rules which forces firms to take the full cost of pensions
into their yearly accounts.
Whitbread believes that this will cause volatile pension
costs within their present system and has acted to protect the organisation and
its employees.
Probert explained, “It helps to mitigate the effects of FRS
17. Put very simply the cost of the pensions now goes onto the bottom line and
a lot of organisations in our field are having to make changes because of it.
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“We have a duty to look at avenues for cost control and a
duty to our employees.”
