UK - Chemicals giant Croda is to nearly treble its contributions into its defined benefit scheme in a bid to slash its £35m deficit.
The moves come after chairman Anthony Beevor warned staff that in order to keep the £225m 1/60ths final salary scheme open, both employer and employee contributions would have to rise.
Watson Wyatt is conducting an actuarial valuation.
Scheme secretary John Ainger said while the stock market rally had eased some funding pressures, increased longevity and rising costs are still a concern.
Ainger said that company contributions would have to rise from 12.3% to 30% to plug the deficit.
He added that following consultations with staff, workers who joined the scheme before 2000 would have to increase their contributions from 4% to 6%. All remaining staff will have to increase their contributions by one percentage point to 6%, an increase which Ainger admitted was “less aggressive” than originally planned.
Employees who do not accept the increased contribution rates will have their accrual rates cut to 1/80ths.
Beevor said: “We believe our schemes are important to our staff and to us in attracting and motivating them. We have decided to retain the DB schemes but, following on from consultations with staff, on a basis which shares the increased funding cost burden between the company and employees.”
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