Persimmon has switched its accrual basis for around 420 pension scheme members so it is calculated on career average salaries rather than final salary.
The change to career average revalued earnings (Care) accrual is designed to reduce the housebuilder’s exposure to increases in the costs of future accrual of benefits in the scheme.
The cost saving measure, announced in the firm’s half-yearly report, was made following confirmation of a £125.4 million deficit at the end of June 2010. This was higher than Persimmon Homes’ total gross profit of £166.3 million in the six months to the end of June 2010.
The report, published this week, stated: “As a result of our continuing review of the provision of pension benefits within the group, we have decided that, within the defined benefit pension scheme, future accrual will be based on career average salaries rather than final salary prior to retirement.This change to the basis of future pension accrual commenced on 1 July 2010 and is designed to reduce the group’s exposure to increases in the cost of future accrual of benefits in the scheme.”
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