Chemical firm defends axeing final salary pensions for new employees

first_imgChemical firm defends axeing final salary pensions for new employeesOn 22 Jul 2003 in Personnel Today Previous Article Next Article The HR director at chemical manufacturer Rhodia has defended his firm’sdecision to close its final salary pension scheme to new members despite fierceopposition from some workers and their unions. Employees at two of Rhodia’s 12 UK plants went on strike last week followingthe company’s decision to replace its final salary scheme with a money purchasescheme for new staff. Bob Tyler told Personnel Today the company had reluctantly decided to wind upits final salary for new members because of the volatile stock market. The HR chief said Rhodia will make contributions of about 13 per cent ofsalary to the new money purchase scheme, with staff adding up to 7 per cent. “We have not looked at this in isolation,” said Tyler. “Whatwe are offering in terms of pensions is certainly there or thereabouts comparedwith our major competitors.” Tyler said the decision to axe the final salary scheme for new members wasalso affected by a significant pension deficit that Rhodia inherited when itacquired Albright & Wilson in March 2000. He said Rhodia considered radically restructuring its benefit provision forall staff, but had settled on the option to close the final salary pension fornew members because this was the only way to avoid reneging on agreements madewith existing employees. Rhodia started consulting with workforce representatives over the plans lastSeptember and after opposition from unions spent three months looking atalternative pension options. However, these were not considered viable and in April the company toldrepresentatives of the Amicus, T&G and GMB unions that it would be goingahead with its original proposals. Derek Simpson, Amicus general secretary, criticised Rhodia’s decision.”The workers at Rhodia are not just fighting for the future of the scheme,but for the future of their children and their communities,” he said. By Ben Willmott Comments are closed. Related posts:No related photos.last_img read more

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