Fujitsu Services plans to close its final salary pension scheme
David Woods, 15 May 2009
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1 comment on this article.Fujitsu Services is planning to close its final salary pension scheme to future accrual, affecting the retirement benefits of 4,000 active members.
The company confirmed it is about to enter into a consultation process, which will begin today, to close the defined benefit pension to future accrual. It will hold talks with its pension members committee and trade union Unite during the consultation period.
A spokesman told HR magazine: "While this action is regretted, it is a prudent step to enable us to manage pension risk.
But Simon Banks, principal at pensions consultancy Punter Southall, said: "We believe today's announcement marks the beginning of another wave of scheme closures. We know many other companies are considering similar action, and some are in advanced discussions with trustees.
"The turbulence in the markets over the last 12 months has reminded employers of the volatility they are exposed to through their pension plan. At the same time, many are squeezed for cash and are having difficulty repaying deficits in the timescales they previously agreed. In such situations, the funding regime introduced in 2005 steers employers and trustees towards closure to future accrual and using the savings to address the deficit.
"This approach means trustees are placed in a difficult position, balancing the future benefits of members against the security of the benefits already promised."
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Tony Bell - 15 May 2009
Pensions are what we all work towards throughout our careers. The cynical attitude to the possibility of closure of such schemes can only be compared to, children who abandon their parents when their health fails and caring gets tough as they get older. Perhaps the hope of the withdrawal of this scheme will possibly precipitate Staff with long service to take early retirement, effectively removing high earners from the company which is trying to cut costs without the neccesity of creating possible high cost redundancies.
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