Big Food Group, the frozen food retailer that recently changed its name from Iceland, faces possible legal action for closing its final salary pension scheme to existing members.
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Almost a quarter of the 4,400 employees on the pension scheme have got together to create a protest group to sue the company for breach of contract. The scheme is being closed on 31 July, according to the Telegraph.
The scheme has been closed to new entrants since 1997 as part of a three-year overhaul to streamline costs and boost the share price. Last year the scheme cost £10m (US$15.2m), almost a quarter of overall group profits of £43.5m. The move could save the group around £4m per year.
Employees are claiming that the cut in benefits means they will have to make contributions, and as such constitutes a virtual pay cut. They are being asked to contribute £50-100 each to fund the court action against their employer, which is likely to cost £40,000-50,000. It is unclear how many employees will be sufficiently convinced of the chances that the action will succeed to hand over their contribution.
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