Food and drink organisation Nestle has agreed to a pay and pensions deal for 7,600 UK employees put forward by the GMB and Unite trade unions.
The new package includes a career average defined benefit (DB) pension based on an 80th accrual rate for all existing members, the introduction of a salary cap for DB pensionable earnings of £45,000 indexed to the consumer prices index, normal pension age to be linked to state retirement age, and the closure of the scheme to new Nestlé employees from 1 July 2016.
Nestlé employees who are not currently members of the DB scheme will also be given a final opportunity to join the scheme.
The deal also includes a two-year 3% pay rise for production workers for 2016 and 2017, which is designed to lessen the impact of the increased pension contributions for employees.
It will apply to employees who are based at Nestlé’s UK head office in Gatwick, as well as sites in York, Dalston in Cumbria, Fawdon in Newcastle upon Tyne, Girvan, Halifax, Tutbury and Buxton in Staffs, Rickmansworth, Welwyn Garden City, Bromborough in Wirral, Staverton near Trowbridge, Sudbury in Suffolk, Wisbech in Cambridgeshire, Aintree and Brunswick Business Park in Liverpool.
Julia Long, national officer for food and drink at Unite, said: “This pension package, accepted overwhelmingly by the workers, secures the future of the career average pension scheme, which a year ago was under threat. A lot of hard work went into safeguarding members’ pension provision at Nestlé at a time when [workplace] pension schemes in the UK are under a great deal of pressure.”
Dame Fiona Kendrick, chief executive officer and chairman at Nestlé UK and Ireland, added: “The matter of pensions is hugely important to Nestlé and that’s why it was imperative that we undertook a comprehensive and wide-ranging consultation process on the changes that we proposed in July 2015. We have always been serious about listening to our employees and working closely with the trade unions.
“We are pleased union members have accepted the revised [organisational] position on pensions (subject to trustee consent) which includes retaining a core defined benefit arrangement.”