WH Smith to scrap final salary pension |
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Published
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Wed, 10 Jan 2007 14:09
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LONDON (AFX) - WH Smith PLC, the newspapers, books and stationery retailer, has proposed scrapping the final salary section of the WH Smith Pension Trust scheme.In a statement it said it has written to the 11 pct of its employees who are members of this section proposing to bring their pension arrangements in line with the 'money purchase' (or defined contribution) scheme available to the other 89 pct of the group's workforce.'The long term costs of running a final salary pension scheme continue to be high and difficult to predict, mainly due to low investment returns and members living much longer,' the retailer said.'These factors have prompted many companies to review their pension arrangements and WH Smith is no different in this respect.'The group's pension deficit currently stands at 41 mln stg.The money purchase arrangement bases an individual's pension accrual on the level of contributions made, investment returns and the cost of buying a pension on retirement.Employee benefits already accrued will not be affected.WH Smith said the proposed changes, which have already been discussed with the Trustees, are subject to a consultation period with employees and their representatives.Meanwhile, Smiths News PLC, the newspaper and magazine distributor which demerged from WH Smith last September, said it has written to 700 of its 4,300 employees who are members of the WH Smith Pension Trust scheme advising them of the proposed changes.At 12.27 pm shares in WH Smith were up 3/4 pence at 378-3/4 pence, shares in Smiths News were down 6 pence at 133 pence.newsdesk@afxnews.comjdd/ksCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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