Business

Asda to close final-salary pension scheme

Asda store facia
Image caption Asda joins a growing list of big employers who have shut their schemes to current members

Asda, the UK's second-biggest supermarket chain, is closing its final-salary pension scheme.

The 3,800 staff affected will be offered membership of the company's defined contribution scheme instead.

The firm blamed the move on a big rise in the scheme's deficit, which has gone up from £210m to £400m in just nine months.

Asda is the latest in a long line of similar scheme closure by other big employers.

In the past few years, firms such as Aviva, Taylor Wimpey, Trinity Mirror, Pirelli, Fujitsu, Barclays, Morrisons, Vodafone, BMI, Dairy Crest, IBM and Costain have all shut their final-salary pension schemes to their existing members.

The Asda employees, mainly managerial and administrative staff, will join the defined contribution scheme that has been on offer to new recruits since 2005.

However, they will be offered a one-off payment amounting to a quarter of their annual salaries.

The company said it would also improve its defined contribution scheme.

"We need to address the deficit," said an Asda spokesman. "It has grown significantly and it is important that we protect the business in the future," he added.

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