UK – Pest-control firm Rentokil is to close its final salary defined benefit pension scheme and cut equities exposure in a bid to address its £325m (€481m) deficit.

It said: “The company is proposing to close the DB Sections for the future accrual of benefits for active members.” Instead workers will be offered membership of a defined contribution scheme.”

The firm said on November 3 that it was in discussions with the trustees of the DB section of the Rentokil Initial Pension Scheme regarding measures to address the scheme's funding deficit.

“In response to a general trend of increasing longevity, which has adversely impacted the scheme, the company and trustees have agreed to a more prudent basis for estimating longevity that will increase this deficit by an additional £24m.

“An agreement has been reached between the company and the trustees to make an immediate payment of £200m, with the remaining deficit being met by a series of payments ending no later than January 2012.

“The changed regulatory environment for pensions requires the company to deal with these issues in a shorter timescale than it might otherwise have done.

“The total funding required to address the deficit will be in the range of £370m-380m depending on the final timing of the payments.

It would seek a lower exposure to equities over time.