With the approval of the trustees of the scheme it is reducing the future accrual rate for members by 25%, but at the same time the group is also increasing its own contribution rate from 8.25% to 10.6%, and has made a one-off payment of 25m into the scheme.

The future accrual rate will be 1/80th per annum for all members. Previously, the rate for most members was 1/60th.

This change will have no effect on benefits accrued to date, in fact they have been made more secure, explained finance director Ray Morley.

Although the accrual rate has been reduced St Ives contributions will still go up. The 25m payment will strengthen the financial position of the fund, which is very important," he added.

The defined benefit scheme has 1,900 members, and was closed to new entrants in April 2002.

Under FRS17 the deficit in the scheme at the end of St Ives last financial year had grown to 61.8m, and the group and its pension trustees had been reviewing the options for dealing it ahead of the next formal valuation, which is not due until next year.

by Jo Francis