Page last updated at 09:27 GMT, Friday, 15 May 2009 10:27 UK

Fujitsu cuts final salary pension

Fujitsu stand at a trade fair in Japan.
Fujitsu says its plan "is regretted"

The computer services company Fujitsu Services is planning to close its final salary pension scheme.

The company closed it to new joiners in 2000, but now wants to shut the scheme to existing staff as well.

Fujitsu said it was regrettable, but that it was "a prudent step to enable us to manage the pension risk".

The company will now consult with the 4,000 out if its 14,500 staff who are still members of the scheme, along with the trade union Unite.

Peter Skyte, a national officer of Unite, said his members would campaign against the proposed closure.

"Fujitsu Services is a highly profitable company and made £177m profit in the last financial year," he said.

"The company has yet to produce any proper justification for this latest attempt to raise profits by cutting pension benefits."

The company has begun the 90-day consultation procedure required by law.

Growing trend

Most final salary pension schemes in the private sector have closed to new joiners since the trend started in the mid 1990s.

But due to the existence of some large schemes that are still open, 47% of final salary scheme members in the private sector are in ones still open to new joiners, according to figures published last year by the Office for National Statistics (ONS).

However, experts have been predicting for some time that more companies would follow the examples of firms such as Rentokil and WHSmith and close their pension schemes to existing staff as well.

The typical reason is to cut the cost of providing pensions by replacing the old schemes with a much cheaper alternative, known as a defined contribution pension fund.

"We believe today's announcement marks the beginning of another wave of scheme closures," said the actuarial firm Punter Southall.

"We know many other companies are considering similar action, and some are in advanced discussions with trustees."



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