UK - British Polythene Industries is imposing a pay freeze and boosting pension contributions in a bid to stem a spiralling £11m deficit in its scheme.
BPI will increase employer contributions from 6% to 16% – at a cost of £1.8m per year – to save its current pensions arrangements.
The firm, which unveiled the plans in its preliminary financial results, said: “It is a matter of concern, both for our employees and shareholders, that our pension scheme is in deficit.
“Your board has given this matter much thought and is keen to retain the scheme in its current form.”
The last scheme valuation in April last year revealed the £11m deficit, compared with a “small surplus” three years earlier.
The board said it would review the position on funding and pensionable pay levels in future years, depending on the status of the scheme.
• Thread producer Coats has managed to retain a surplus on its £1.3bn defined-benefit pension scheme – despite the gross value dropping by £200m.
A valuation in December 2001 highlighted a surplus of £219m but that plunged to £16.5m at the end of last year.
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Aegon has called for the government to double the tax exemption on employer-arranged pension advice, up from £500 to £1,000.
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