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The dwindling number of final-salary pensions in the private sector shrank further today when hotel and restaurant group Whitbread axed its retirement scheme.
The owner of Premier Inn and Costa Coffee vowed to beef up its substitute offering — a less-generous, defined contribution scheme, where the employee's pension pot is not linked to final salary and instead depends on the performance of stock market investments.
Around 800 staff are affected as Whitbread had already closed its final salary pension, known as a defined benefit, to new members in 2002.
The FTSE-100 leisure giant added that as well as improving the terms of its defined contribution scheme, it would allow a further 14,000 employees to join. Whitbread currently employs around 30,000 people.
Lesley Williams, pensions director at Whitbread, said: “The changes will bring the pension benefits across the business into line and ensure that we offer fair pension benefits to all.”
Only three FTSE-100 companies, Tesco, Diageo and Shell, still operate final-salary schemes open to new members.
Many others have been under pressure to close defined-benefit schemes to existing members because of the credit crunch and growing life expectancy.
Barclays and Wm Morrison are among the leading companies to have closed their final salary schemes in recent months.
