Final salary pensions axe hits 4,000 Asda staff
Former Labour Cabinet Minister Lord Hutton said long-term pension reform was needed to tackle a massive black hole in the system.
Leeds-based Asda briefed the 4,000 affected staff, who all work at manager level or above, yesterday afternoon.
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Hide AdAnyone who joined Asda after 2005 will not be affected as the final salary scheme was closed to new entrants in 2005.
The supermarket chain said it would offer affected staff compensation in the shape of a one-off payment of 25 per cent of their current salary.
In addition it is planning improvements to the replacement scheme that will benefit all employees, not just those in the final salary scheme.
Companies are under growing pressure to restructure their pension schemes as a healthier, ageing population, combined with fluctuating asset values, wreak havoc with balance sheets.
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Hide AdEarlier this year, York-based housebuilder Persimmon, Hull-based telecoms group KCom and Ilkley-based construction services firm NG Bailey all announced plans to close their final salary pension schemes.
Asda's move follows arch rival Bradford-based Morrisons, which closed its final salary scheme last year. Asda said the closure of the scheme will affect 4,000 of its 175,000 employees.
"We need to address the deficit," said an Asda spokesman. "It has grown significantly and it's important we protect the business in the future. The deficit has almost doubled to 400m in just nine months."
In a separate move yesterday Asda briefed staff on plans to close the headquarters of its new acquisition Netto in South Elmsall, West Yorkshire. The move will affect 120 staff, all of whom are expected to be relocated to other Asda sites in Yorkshire.
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Hide AdAsda proposes closing the South Elmsall head office and Netto Store Service Centre once the store conversion process is well under way next year.
Last month Asda was told it would have to sell a quarter of Netto's stores in Britain to gain clearance for its 778m acquisition of the budget chain.