NEC closes its final salary pension scheme
Hundreds of workers at the NEC Group have had their final salary pension scheme closed, three months after it was revealed the scheme had run up a £20 million deficit.
The group said that after two months of consideration it would be deferring the scheme as of June 30, although it would be honouring pension entitlement up to that date.
Nearly 360 workers at the NEC will be affected, some 40 per cent of the permanent workforce.
The final salary fund has been closed to new employees since October 2006. The group said employees on the final salary scheme would be given the option to join the group personal pension scheme (GPPP), the company’s defined contribution pension scheme.
John Hornby, the chief operating officer of the group, said: “Enabling all employees to transfer to the GPPP enables The NEC Group to provide a level playing field for pension provision while managing the level of financial risk to which the company is exposed throughout these continuingly difficult times. We believe that the GPPP is an attractive element of an overall remuneration package which is competitive.”
After the level of the pension deficit came to light, the company agreed to put an extra £2.7 million a year into the scheme to try to make up the shortfall.