Tarmac axing pension plan

Wolverhampton concrete and quarrying group Tarmac today revealed it is closing its final salary pension scheme.

The move affects around 1,200 of the company's 7,100 staff in the UK. It follows moves last month to freeze pay at the company for the first time in more than 20 years as part of a bid to safeguard jobs.

The building materials giant, which employs around 500 people at its Millfields Road headquarters in Ettingshall, is also offering workers up to five weeks of unpaid leave.

The existing pension scheme, which pays out based on an employee's salary when they retire, was closed to new members eight years ago.

It will be replaced with a defined contribution scheme next March, following in the footsteps of many major companies in recent years.

Managing director Karim Hajjar, said today: "Our final salary pension schemes have been closed to new members since 2001, and we are now proposing to close them for future benefits with effect from March 21, 2010, and to replace them with a competitive defined contribution pension scheme."

He added: "These proposals are not something we have taken lightly; however, it is essential that we adapt to changing economic conditions in order to safeguard the sustainability of our business in the long term."

The company said it is now consulting with staff affected by the proposal.

Tarmac has been hurt by the global downturn in the construction industry and in July it was revealed profits had slumped 83 per cent at the company, down to just £16 million from £98m 12 months earlier.

Tarmac is currently owned by global mining giant Anglo American.