Boots announces changes to company pension scheme

Boots, now part of the Alliance Boots group, has this weekend set out plans to reorganise the company's pension scheme which will see employees transferred from the final salary scheme to a "less generous" scheme. It would appear that despite the company pension scheme having a surplus of around £188 million there is concern about the future liabilities that final salary pension schemes can bring.

The 75,000 strong workforce have been briefed about the changes to the pension scheme and Boots confirmed that 50,000 employees are not involved in any company pension scheme, with 15,000 having membership of the final salary scheme in question. If the new pension scheme proves popular amongst workers the company argues it could actually be more expensive to run. However, there is no doubt that the liabilities connected with final salary pension schemes appear to be the main reason why the company has introduced the changes.

Slowly but surely the final salary pension scheme in the UK, at least in the private sector, is becoming something of a rarity. More and more schemes are being closed to new members, transferred to money purchase schemes and in general pension entitlements for the future are under pressure.