Thomas Cook pension scheme closed

THOMAS Cook has finally shut its final salary pension scheme by closing a loophole that allowed existing staff to opt in.

The company closed the scheme to new employees in April 2003, replacing it with a defined contributions scheme. However, this month, the company closed it to staff who have been at the company for more than three years but had not previously joined.

A Thomas Cook spokeswoman said staff had been given three months’ notice. She refused to reveal details of the replacement scheme because it is undergoing an audit that could lead to changes in contribution levels.

Travelcare, part of the Co-operative Travel Trading Group, also scrapped its final salary pension scheme this month, replacing it with a career average earnings scheme. Employees contribute 6% and Travelcare contributes 16% of their salary.

Thomson is the last of the large employers to offer a final salary scheme. After a year, shop managers can join contributing 5.5% of their salary and the company 20.35%. Agents can chose between 2% or 4% contributions to a retirement savings plan with the employer contributing 1.5%.

MyTravel matches staff contributions of 3%.

Transport Salaried Staff’s Association travel negotiator Rick Justham said employers should improve pensions.

“Employers have a duty to their staff and we will encourage them to take pensions more seriously,” he said. “Pensions are doubly important for low-paid staff – saving for retirement is even more relevent.”

Last week, the Government-backed Turner Report concluded staff should automatically be enrolled into company pension schemes, although they should have the right to opt out.

Staff would be forced to contribute a minimum 4% and employers 3% while receiving tax relief worth 1%.