Thousands of Midland car workers have received a major cash boost after Jaguar Land Rover backed down over plans to close its final salary pension scheme.
The Midlands’ biggest manufacturer has withdrawn proposals to close its current defined benefits scheme to future accruals and introduce a new defined benefit retirement fund from next month.
The Tata-owned company first mooted the closure plan to employees last year but has now decided against going ahead with the plan.
But, from April 19, no new entrants will be accepted into the final salary scheme.
New starters will instead be invited to join a JLR Defined Contribution pension plan, with the employee contributing four per cent and the company eight per cent.
The pensions shake-up, first proposed in an employee bulletin issued throughout the JLR empire last September, was watered down following lengthy negotiations with trade unions.
JLR spokesman Jonathan Griffiths said: “We were proposing to close the defined benefits scheme which is in place for current employees.
“But the company listened to concerns from employees as well as trade unions.”
He declined to reveal if the current scheme, which will now remain in place, was in substantial deficit.
JLR’s decision to backtrack marks a rare victory for final salary pensions, which have come under attack from employers desperate to bridge fund shortfalls, caused by longer life expectancy and market conditions.
Locally, the West Bromwich Building Society announced last summer it was closing its scheme after running up a £1.6 million deficit while the National Exhibition Centre has drawn up proposals to close its final salary fund, which has a £20 million shortfall.
Other plans by JLR to slash new starter rates for production workers from £26,000 a year to £21,000 remain unresolved.
Around 75,000 private sector workers lost their final salary pensions last year as companies tightened their belts.