Thousands of Cadbury workers are being asked to virtually double their pension contributions to help reduce an estimated £200 million-plus deficit in the UK fund.
A 60-day consultation period is under way over proposals to increase pension contributions to the final salary scheme from five per cent to nine per cent. Company contributions would remain at the current figure of 18 per cent.
The move, which would see workers forking out hundreds of pounds extra a year, comes as new Cadbury owner Kraft pledges to protect the pensions of all members less than a month on from the controversial £11.7 billion takeover.
In a joint letter to more than 28,000 Cadbury UK pension fund members, Kraft and the scheme trustees say: “Kraft Foods would like to take this opportunity to reassure you that the decision by the shareholders to accept Kraft’s offer has not undermined the security of your pension and that the trustees and Kraft are focused on protecting the pensions of all members.”
Richard Johnson, corporate affairs director for Kraft Europe, said: “People are quite concerned about their pensions after a takeover like this and we are working with the trustees to address the whole deficit situation and find the best way forward.
“Cadbury started a consultation period before the takeover which is due to finish in March. We have agreed to honour that process. The contributions will change and the final salary scheme will be closed at some point to newcomers.
“We are still committed to providing attractive pensions to our employees but they have to be sustainable in the long term.”
A source said: “This is in line with what a lot of blue chip companies are doing.”
Consultation will end on March 19, with changes implemented from July.