Asda closes final salary pension scheme

Asda is closing its final salary pension scheme as it seeks to tackle a soaring deficit, in a move affecting around 4,000 of its staff, it said.

The Walmart owned chain closed the final salary scheme to new members in 2005, said it would compensate affected employees with a cash sum equivalent to 25 per cent of salary.

It will also make unspecified improvements to the replacement scheme for all 175,000 of its staff.

Asda is the latest in a string of British companies to close a final salary pension scheme as rising longevity and turbulent financial markets drive schemes into deep deficits.

The grocer said its scheme's deficit had doubled in size to £400m over the past nine months.

A government-commissioned report said public sector workers might have to pay more into their pensions and that it would look into alternatives to final salary schemes.