‘Costly’ scheme gets cold shoulder

first_img Comments are closed. ‘Costly’ scheme gets cold shoulderOn 19 Feb 2002 in Personnel Today Previous Article Next Article Food retailer Iceland is to terminate its final salary pension scheme in abid to cut costs. The supermarket claims its ‘challenging’ financial situation means it cannotafford a final salary pension scheme. The company is currently consulting over the move that affects 4,400employees. These staff will join the 25,600 under a pension scheme with no guaranteedfinal payout. In a letter to staff, Iceland chief executive Bill Grimsey said the companycould not afford to maintain the final salary pension scheme. A spokesman for the company said: “These old [final salary]arrangements are expensive to maintain, unpredictable in terms of cost, andabsorb over one-quarter of the group’s profits.” The T&G union claims the move will hit staff morale and undermineattempts to improve service. Mike O’Leary, a spokesman for the union, said: “Any downfall in thepresent value of the company is a direct result of the existing management andthey must shoulder the responsibility of the situation. This decision willcreate a demotivated workforce with no incentive to deliver the best qualityservice.” Other large employers have scrapped their final salary pension schemes,including Lloyds TSB, Sainsbury’s and ICI. Related posts:No related photos.last_img read more