Alliance Boots considers closing final salary pension scheme

Alliance Boots is considering closing its final salary scheme to existing employees as part of a wider review of the firm's HR policies.

Stefano Pessina, the firm's executive chairman, has described the current pension arrangements as unfair due to the large costs involved in providing the benefit to a small proportion of the workforce.

The Boots Pension Scheme, agreed a funding programme paid over ten years. This was an initial payment of £52m, followed by five instalments of £20m and a further five instalments of £29m. A final contribution of £120m is due to be paid at the end of ten years. All these figures will be reviewed during successive valuations. In addition, a single payment of £50m has been made into the Alliance UniChem Group UK Pension Scheme.

The firm, which employs 73,000 people in the UK, has 16,000 members in its final salary scheme, compared with 4,500 employees in its defined contribution (DC) pension.

A statement from the firm said: “Alliance Boots regularly reviews its HR policies to ensure they are in line with the market. This includes pension policies where we are reviewing all options, although no decision has been made.”