WH Smith has proposed to close its final salary pension scheme which will affect 1,800 employees.
The move is intended to bring pension agreements for the 11% of employees who belong to the defined benefit scheme in line with those offered to the rest of WH Smith’s workforce.
The company said that the scheme,which has been closed to new staff members since 1995, is costly to run and difficult to predict which it puts mainly down to low investment returns and members living longer.
WH Smith is currently making efforts to reduce its £41m pension deficit. The proposed changes will see the existing final salary scheme members moved over to a defined contribution scheme. This will mean that the individual’s pension accrual going forward will be based on the level of contributions made, investment returns and the cost of buying a pension on retirement. However, any benefits they have already accrued will be unaffected.
The proposals have been discussed with the scheme’s trustees and are now subject to a consultation period with employees and representatives.