By Norma Cohen and James Redgrave
produce: November 25 2009 23:03 | Last updated: November 25 2009 23:03
Vodafone is supplying to close its £755m final salary tribute scheme to slightly 4,000 of its employees, becoming one of the largest employers to propose such a make a motion in an attempt to control the costs and risks of privacy benefits.
The fellowship sent a letter to staff this week do k flatn them of a consultation exercise, as required by law, in advance of a planned closure of the defined benefit scheme in April.
Shut out: the themes planned move is an bm to make benefits sustainable in the long term
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Vodafone follows some(prenominal) other high-profile employers, including Barclays, Whitbread and Fujitsu, in blocking current workers from earning further retirement benefits that are a portion of their final salary.
The move comes amid a flurry of industry surveys suggesting a growing number of employers many an(prenominal) of whom closed their schemes to new entrants years ago are now considering shutting defined benefit pension funds to exisiting workers by and by having sustained heavy losses on investments in the recession.
start interest rates have inflated liabilities, while uprise life expectancy has increased costs.
Vodafone said the company was making the move because of the rising cost of defined benefit pensions. The base plans to substanti eithery improve the defined contribution pension programme. This depart result in pension benefits that are fair to all employees, sustainable in the long term and affordable for employees and the company, the group said.
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