Rentokil - the first of many?

Dec 21 2005 by Brian Amble Print This Article

"Rentokil is probably the first FTSE 100 company to close its final pension scheme to existing employees, but we don't think it will be the last."

That's the warning from Andy Fleming, spokesman for the National Association of Pension Funds, after Rentokil proposed freezing the pensions of some 3,000 employees at current levels in a bid to tackle a pension deficit of almost £350 million.

Nearly nine in 10 of all final salary schemes are estimated to be in deficit, faced with collective shortfalls of some £130billion. FTSE 100 companies account for around £40billion of this.

"We think it will happen increasingly over the coming years just because employers are under so much cost pressure from running final salary schemes," Mr Fleming said.