FOOD giant Nestle has announced plans to close its defined benefit pension scheme, sparking the threat of industrial action.
The company, which employs around 8,000 workers in the UK including nearly 3,000 in Yorkshire, said it planned to replace it with a defined contribution scheme.
Unions accused the company of an “act of betrayal” and warned that strikes “loomed large” if the change goes ahead.
Nestle said it introduced the option of a defined contribution scheme for employees in 2010 while continuing to offer a defined benefit scheme.
The firm employs 2,115 people on its York site and 720 in Halifax, including logistics and office staff, and factory workers producing KitKat, Aero, Yorkie, Milky Bars, Polo, Quality Street, After Eight and Easter eggs.
A company statement said: “Unfortunately, the costs and risks of providing a defined benefit scheme have continued to increase substantially in recent years.
“With regret the company is therefore proposing its closure and replacement with one of the most attractive defined contribution schemes available.”
Dame Fiona Kendrick, chief executive and chairman of Nestle UK and Ireland, said: “We realise that these proposed changes will cause concern for employees who are building up defined pension benefits in the Nestle UK pension fund, or are eligible to do so.
“We are very sorry that we have to propose these changes but under the circumstances we believe it is the right option.”
The company said it will consult employees and unions and will give “careful consideration” to their response before a final decision.
Unite national officer Julia Long said: “Many loyal workers will feel led up the garden path and see these changes as an act of betrayal by Nestle. Five years ago they agreed to pension changes in good faith on the understanding that their pension would be secure for the future.
“Now Nestle is tearing up their contracts with their future with many workers facing being worse off in retirement. We will not stand by and let that happen and would urge Nestle to think again and honour its past promises.”
GMB national officer Stuart Fegan said: “The 7,600 Nestle workers which these proposals affect will wonder why a company such as Nestle, generating significant profit in the UK and other world markets, can justify such detrimental plans.
“Particularly as these proposals directly affect those Nestle workers who manufacture the products that make Nestle the leading world food manufacturer.
“We urge Nestle to think again on these proposals as we fear that the UK workforce will not accept these changes willingly.
“Strike action, with all its consequences for Nestle’s corporate brand if these proposals are implemented, looms large across Nestle in the UK.”
Unions said if the proposals go ahead, a career average scheme will be closed to new entrants from 2016 and closed to future pension build-up for existing members from the start of 2017.