Connected Research

Union policy research in the 21st century

Four large companies with open final salary schemes

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Following the recent announcements of various types of pension scheme closures by BP, Barclays and others (I blogged about this earlier), I saw a few references in the media to there being four FTSE companies with final salary schemes still accepting new employees as members. Searching (via one or other popular search engine) produced an identification of these four as follows: Tesco; Shell; Diageo; and Cadbury Schweppes (see, for instance, here or here). Facts should always be checked, so I did (by looking at similar search engine pages for company name Pension Scheme).

Here’s my results:

The Tesco Pension Scheme is open to new employees, although most Tesco employees choose to be members of Tesco Pension Builder instead. This is a career average scheme in which the membership outweighs that of the final salary scheme by about 6:1 (and probably for good reasons, too, given Tesco’s employee profile). Not all the sections of the Diageo Pension Scheme which remain open are open to all employees: the main scheme was closed in September 2005. The Cadbury Schweppes Pension Scheme does not appear to be open to new members at all on a final salary basis – since 2001, membership of the company’s pension scheme has been offered to new employees on a career average basis.

So, FTSE100 companies still offering a final salary scheme to new employees would appear to be Shell (which made changes to its scheme in January, including a shift in the normal retirement age to 65); and Tesco (where changes were also made to the benefits structure of the scheme earlier this year, and where most employees choose membership of the career average scheme anyway).

Of course, there may be other blue chip companies still offering open final salary schemes not included in this list (which may have been drawn from a single source and which may well not be accurate, or quoted accurately, despite the multitude of citings). I limited my work to checking the accuracy of the four most commonly cited, and it’s probably worth doing some further work on identifying just which large, blue chip companies still do offer final salary schemes to new employees – watch this space for further details if ever I get around to this fairly mammoth exercise…

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Written by Calvin

06/07/2009 at 3:07 pm

Posted in Pensions

Tagged with ,

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