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Premier Foods calls the end of the final salary pension scheme

Robert Schofield, the chief executive of Premier Foods, has today called the end of the final salary pension scheme in the UK having effectively been forced to ditch the company scheme for its 17,000 strong workforce because of the company's high level of debt. Premier Foods, which owns brands such as Hovis, Mr. Kipling and other well-known food names, was the last FTSE 350 company to open a final salary pension scheme to provide adequate pensions for its workforce in retirement.

There is really concern that the company was one of the final obstacles to the collapse of the final salary pension scheme sector in the UK. When you consider that the group of Premier Foods pension schemes have a combined deficit of over £430 million in the latest report accounts for the company it is not difficult to see why this decision has been made. Whatever the reasons, and they are somewhat complicated, final salary pension schemes in the private sector are set to become something of a dinosaur.

While the situation for companies contributing into these final salary pension schemes is obviously difficult this will be nothing compared to the financial difficulties that pension fund members will face in the future.

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