End for Nestlé final salary pensions (From York Press)

End for Nestlé final salary pensions

9:08am Friday 12th March 2010 in

• Skip social links
• Print
• Email
• Comments(8)

NESTLÉ has announced it is scrapping final salary pensions for staff – but claimed its pension scheme will still be one of the best in the industry.

The company said it would continue to offer both “defined benefit” and “defined contribution” options for both existing and new employees, but the resulting defined benefit pension would relate to an employee’s average salary during their career instead of their final salary.

A spokesman said this was considerably better than the pensions being offered by many companies, which were based on a defined contribution structure, with no guarantee of the pension amount at the time of retirement.

Paul Grimwood, chief executive and chairman of Nestlé UK, said it was committed to providing quality pensions in order to attract and retain the best people. He was confident its scheme would remain one of the best.

He said: “These proposed changes will ensure the long-term sustainability of our pension arrangements and enable us to continue to operate effectively and efficiently as a business.”

But GMB union leader John Kirk said he was “bitterly disappointed” by the announcement.

He said the change would leave members worse off, and was another example of the company trying to change employees’ terms and conditions.

He said the changes would be “fiercely resisted”, but stressed they were a separate issue to pay, over which the union is currently in dispute with Nestlé.

The company said a period of formal consultation with employees would now begin.