GERMANY - Loss-making car rental group Avis Europe has disclosed that it gained €3.2m by closing the pension scheme in its German branch for new employees and freezing accrued benefits.
"We've been in negotiations during the first half of this year with the workers' council in Germany and we have agreed with them to actually close the German pension scheme," financial controller Stuart Fillingham told IPE.
"Any new joiners to the company will have to make their own pension arrangements."
"In terms of the existing employees their existing benefits that they have accrued in the German scheme they have effectively been frozen."
Workers gave their consent earlier this year to in light of "difficulties in Avis' German business".
Asked why the company had chosen to close the scheme, Fillingham explained that this was part of a restructuring project which is currently affecting the whole of Avis Europe aiming cutting costs.
As part of this project the UK headcount was reduced in the European head office and in the Manchester call centre.
"As part of that reduction in we have reduced our pension liability going forward," Fillingham said.
Effectively, this left Avis with €1.2m in pension curtailments. Fillingham is convinced that the measure to close the German pension scheme is part of a trend: "We are actually following what I understand to be the country practice of closing company pension schemes."
For the first half of 2006 the Avis Europe group reported revenues of €614m, up 5.5% from last year. Total loss before tax was €11.9m.