CONSULTANT ATKINS last week told the 2,000 staff remaining on its final salary pension scheme that it would be closed from 1 July.
They will be switched into the defined contribution scheme which has covered most Atkins UK employees since the final salary scheme stopped taking new members in 2001.
Atkins' final salary pension deficit stands at £187M, up from £175M a year ago and £69M in 2004. The huge increase is due to new accounting rules which require companies to recalculate likely pension payouts based on people living longer and drawing a pension for longer than previously anticipated.
Barclays Bank has estimated the British consultancy sector could have an overall pension defi it of between £500M and £800M (NCE 18 May 2006).
'Our debt at one point was the fourth highest in the FTSE 250 and represented 29% of our market capitalisation, ' said Atkins group HR director Alun Griffiths.
Closing the final salary scheme was, he said, 'the most appropriate course of action to best balance the interests of all - the scheme members, those who have left and deferred their pension, and those who are retired.' Since 2004 Atkins has paid £31.1M to reduce it's pension deficit. It is paying another £22.5M in March and over the next four years will pile in another £140M.
Pension legislation demands that firms wipe out their deficits over the course of 10 years.
'We have decided to act now when the company is in a strong position rather than in the future when we can be less certain of our ability to make signifi cant cash injections to the plan, ' Griffiths said.
turnover profit deficit deficit previous Company year (£) (£) (£) year (£) % change
Mouchel Parkman 2006 74M 27.4M 47.8M 51.1M 6.5% down Parsons Brinckerhoff 2006 149.4M 8.7M 41.4M 42M 1.4% down Halcrow 2005 280.5M 12.8M 74M 57.3M 29.8% up Arup 2006 474.8M 14.5M 99.2M 112.3M 11.7% down Atkins 2006 1052.5M 62.9M 187M 175M 6.9% up Mott MacDonald 2004 485.5 11.5 58M r results expected in 2 weeks n/a