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Unilever to close final salary pension scheme

Unilever has proposed to replace its final salary scheme with an average salary scheme and a defined contribution option.

The FMCG company is proposing to make changes to its UK pension arrangements to ensure long-term financial sustainability and help maintain the competitiveness of the business in the UK.

The company will enter into consultation with its employees in the UK this summer. The proposals include closing the final salary plan to existing employee members and offering new pension arrangements similar to those introduced for new joiners in 2008.

Under the proposed new arrangements, existing final salary scheme members would be offered a two-part scheme consisting of a defined benefit career average plan plus a defined contribution investing plan with effect from 1 January 2012.

Amanda Sourry, Unilever UK & Ireland chairman said: "Unilever is committed to being a sustainable company in everything we do and our pension arrangements are no exception. The changes have been proposed to help tackle the increasingly unaffordable and unsustainable costs associated with Unilever's UK pension fund.

"Our proposals have been designed to be balanced and flexible, with the aim of ensuring that all of our people can continue to expect a valuable and competitive pension benefit into the future. Going forward, one of the principles we want to establish is that both the responsibility and risks involved in saving for retirement are more equally shared between Unilever and its UK employees. Like many other companies which have already taken similar action, we must face up to this difficult issue now so we can continue to work to ensure Unilever remains a winning and competitive business