News Column

Unilever Chief Attacks Final Salary Pensions

Jan. 26, 2012

Rupert Steiner


Unilever chief executive Paul Polman used a keynote speech at the World Economic Forum in Davos yesterday to slam final salary pension schemes for stifling growth.

The Dutchman -- who is fighting pitched battles with his workforce over changes to their retirement scheme -- said: "Final salary pension schemes don't give young people the chance to enter the workforce."

He believes that firms committed to demanding pension arrangements can be financially crippled when it comes to investing in the future growth of businesses.

An advocate of tackling the issue of youth unemployment, Polman is one of the co-chairs of this year's WEF, the theme of which is The Great Transformation: Shaping New Models -- how we shape our future promoting growth, leadership, sustainability, and society and technology.

He talked about the difficulties businesses face when it comes to finding cash to hire fresh blood. His comments will cause controversy given the scale of his own pension pot. Last year Polman, who has headed the consumer goods giant since 2008, benefited from a company pension contribution of pounds sterling 234,000. The lion's share -- pounds sterling 103,000 -- was to compensate from the loss of pension benefits from his former employer Nestle.

His comments come as thousands of workers stage 11 days of strikes over changes to their pension scheme. They oppose the company's plan to shut their final-salary pension scheme later this year.

Unilever has a pension black hole of pounds sterling 680m and desperately needs to change to a career average scheme to slam the breaks on the escalating cost of funding staff pensions. Unilever has said the new scheme would still be "exceptionally competitive."

Some of the workers from the firm's Port Sunlight factory in Cheshire, England, pitched up at Davos to protest against the pension issue.

Source: (c) 2012 the Daily Mail (London)

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