Unions are confident there is a future for final salary pension schemes, despite the announcement by Unilever last week that it intended to close its scheme.
“I don’t think all hope is lost,” said GMB pensions officer Naomi Cook. “Pensions are higher up the agenda than they used to be - a good pension scheme is a core part of the conditions of employment.”
Cook expressed disappointment at Unilever’s decision and described it as a “knee-jerk reaction to avoid risk”. She said the decision by companies to close their final salary schemes was particularly unfair since many had benefited in the past by not paying in full contributions - taking so-called ‘pensions holidays’ - when pension funds were in surplus. “They enjoy the good times and when the bad times come, they close the pension scheme,” she claimed.
Cook added: “Some companies get into the habit of paying comparatively low contributions and think it’s an unfair burden when they have to pay more, when it’s what they should have been paying all along.”
However, Unilever claimed the decision to close its final salary pension scheme to new employees had nothing to do with the £430M deficit in its scheme. The company said the deficit would be paid off by additional company contributions.