Rentokil to close pension scheme

Rentokil Initial has announced moves to close its final salary pension scheme, which would freeze benefits for current employees, it was reported.

The plans of the business service group are thought to be the first of its kind by a FTSE 100 company.

Employees will have their guaranteed benefits frozen at current levels, regardless of how long they have worked for Rentokil.

Firms have previously attempted to control rising pension costs by closing final salary schemes to new employees.

Rentokil’s chief financial officer, Andrew MacFarlane, said the firm wanted to control the present pensions cost and safeguard against the risk that costs could soar in the future.

He told The Financial Times: “In relative terms, we have one of the largest deficits in the FTSE 100.

“Although we have the financial capacity to deal with the deficit now, we had to make sure that another deficit does not arise in the future.”

Mr MacFarlane said the company was concerned about the impact of rising human life expectancy on its finances.

It is understood that Rentokil will consult with its 3,000 members before a decision on its final salary scheme is made next year.

Rentokil’s pension deficit at the end of November was £325m (€478.3m), according to industry accounting rules.

The total deficit for companies in the FTSE 100 is estimated at about £40bn (€58.9bn).

The National Association of Pension Funds predicted other companies would follow suit and prevent future accruals for existing members.

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