Potter print firm closes book on pensions

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While many companies have already closed their final salary pension schemes to new members —- as St Ives did in 2002 — only a handful have yet gone the next step and effectively put them into mothballs for existing employees.

Rentokil Initial was the first major company to do so after it fought off a takeover bid in 2005.

But pensions experts have warned that many more firms will be forced to freeze final salary schemes after the Pensions Regulator's new proposals for the running of schemes, which came into force earlier this year, added as much as 8% to their costs.

St Ives' existing employees will no longer be able to put money into the generous final salary scheme. Instead they will be invited to join a new defined benefit, or money purchase scheme.

These are usually far less generous than final salary schemes and often see much lower contributions made by the employer.

St Ives made a one-off payment of £25 million into its pension scheme in 2004 and has had to put in a further £20 million today in order to reduce its deficit. But it did not clarify the current size of the funding gap.