Imerys has begun penalising staff that take early retirement following its decision to ditch its defined benefit (DB) scheme, which had an £80m deficit. However, the company is attempting to soften the blow by increasing its employer contributions to its new money purchase plan from 12% to 15%. The French owned mining firm shut the DB scheme to new members in January, blaming falling stock markets. It has also now introduced penalties for workers that retire between 60 and 65.
Kate Lyne, senior HR manager, said: "It was a huge cost to the pension plan to wave those early retirement factors, most other pension [schemes] don’t." Before the changes, staff that drew their pension between the ages of 50 and 60 saw their income docked by a percentage for every year they retired early, but workers who waited until 60 faced no fine. Lyne added: "The scheme was under funded by about £80m and trustees will only put up with so much, so they asked us to look at the scheme and try and close the funding gap. Staff were obviously not happy about the changes but there was a general acceptance that changes were needed to the plan."
Lyne added that the revisions did have some positive effect; they were a chance to get the scheme’s 10,000 members up to speed on retirement. "The feedback we’ve had is that people were confused generally about pensions, so people had the opportunity to ask some basic questions," she said.