HUNDREDS of York workers are to begin a consultation process with Nestlé as the chocolate giant reveals proposed changes to its pension scheme.

Nestlé UK has advised its employees of a proposal to close its defined benefit pension scheme due to cost and risk implications.

Following announcements to staff today, unions have said strike action looms should the plans go ahead.

The pension scheme has around 7,600 staff across the UK paying into a pension pot, with the promise of a defined monthly payment upon retirement, based on salary and service.

The proposals are to close the scheme in favour of a defined contribution scheme, in which employees will pay a specified contribution into their own fund, with their take-home pension amount subject to how much is contributed and changes in interest rates.

Many of the 2,155 York employees working at the company's site in Haxby Road, including factory, office, logistics, product technology centre and Nespresso staff are set to be affected.

Nestlé said it is "with regret" that the proposals are being put forward, and that the costs and risks of providing a defined benefit scheme have "continued to increase substantially" in recent years.

Fiona Kendrick, chief executive and chairman of Nestle UK and Ireland said: "We realise that these proposed changes will cause concern for employees who are building up defined pension benefits in the Nestle UK Pension Fund, or are eligible to do so.

"We are very sorry that we have to propose these changes but under the circumstances we believe it is the right option."

Pensioners already claiming their defined benefit pension will be unaffected by changes, while current employees that have paid into scheme will see their pensions frozen until retirement, with future contributions to be made through the defined contribution scheme.

Nestlé said it is now entering into consultation with employees and Trade Unions and will give "careful consideration" to their response to the proposed changes before any final decision is made.

Unions GMB and Unite have accused Nestlé of acting in "bad faith" as the proposed move "unpicks" pension changes agreed in 2010.

They say the proposals backtrack on pension changes introduced five years ago which saw the final salary pension scheme scrapped for the defined benefit option.

If the proposals go ahead the scheme will be closed to new entrants from 2016 and closed to future pension build up for existing members from the start of 2017.

Stuart Fegan, GMB national officer, said: "Over 7,600 Nestle workers in the UK will wonder why a company such as Nestle generating significant profit here and in other world markets can justify such detrimental plans.

"Particularly as these proposals directly affect those Nestle workers who manufacture the products that make Nestle the leading world food manufacturer.

"Strike action with all its consequences for Nestle's corporate brand if these proposals are implemented, looms large across Nestle in the UK at present."

Julia Long, Unite national officer, said: "Many loyal workers will feel led up the garden path and see these changes as an act of betrayal by Nestle.

"Five years ago they agreed to pension changes in good faith on the understanding that their pension would be secure for the future.

"Now Nestle is tearing up their contracts with their future with many workers facing being worse off in retirement. We will not stand by and let that happen and would urge Nestle to think again and honour its past promises."