WH Smith’s plans to close its final-salary pension scheme for future accrual have angered trade unions.
Around 1,800 shop and office staff will be transferred into the money-purchase scheme along with 700 distribution workers at Smiths News, formerly part of WH Smith Group.
The two firms have written to employees proposing the changes and pledged to honour the benefits accrued so far.
WH Smith says the high and unpredictable running costs prompted its decision to close the scheme for future accrual, which closed to new entrants 10 years ago.
Amicus, which represents over half the staff affected, says it is disgusted by the move and will do everything it can to block it.
The proposed changes will affect 11 per cent of WH Smith staff. They will not affect 10,900 deferred pensioners who have already left WH Smith or the 5,100 existing pensioners and spouses who currently draw pensions from the trust.
The retailer has contributed £282m over the last four years to reduce its pension deficit to £41m. It will pay an additional £10m a year into the scheme over the next five years.
Last June, former National Association of Pension Funds chief executive Christine Farnish said companies should be allowed to break their pension promises to cut costs.
A WH Smith spokesman says: “The long-term costs of running a final-salary pension scheme continue to be high and difficult to predict, due mainly to low investment returns and members living much longer. These factors have prompted many companies to review their pension arrangements and WH Smith is no different in this respect.”
Amicus national officer Ann Field says: “We are appalled to learn that the two WH Smith companies intend to close their final-salary scheme, not least because its provisions were bad enough but a money-purchase scheme will give our members an even poorer return.
“Amicus will do everything in its power to improve and defend members’ pensions.”
Derbyshire Booth Financial Management managing director Greg Heath says: “Final-salary schemes are under enormous pressure and it is coming down to a choice for employees between keeping their job and keeping their pension.”