Dairy Crest has joined the many other companies who have taken the drastic steps to close their final salary schemes to existing members.
Dairy Crest is following closely behind the heels of Barclays, Morrisons and the UK side of IBM in closing their final salary schemes. This comes at a time when the government tries to find a way to restore the link between earnings and pensions.
Dairy Crest will now be transferring employees of the final salary scheme to defined benefit schemes. This is seen as a less generous scheme and will affect around 3,500 of the 8,000 staff.
It is not understood just how much this will save the company struggling in these hard times or how many people would be signing up to the defined benefit scheme.
Over the past 6 months the company has been putting into place strategies to ‘de-risk’ the business and this is another move to do so. Dairy Crest could no longer have an ‘open-ended commitment’ to the final salary scheme when funds were not steady.
The Dairy Crest group’s pension fund are already looking at a deficit of around £63 million, but this figure is only set to rise at the end of the financial year. The scheme had already closed its doors to new members in 2006.
Dairy Crest did however say that their heavy marketing investment in the Country Life brand and Johnny Rotten as campaign front man had helped growth over the last 6 months. It seems that only time will tell for final salary schemes and whether any will survive.