Nissan's Sunderland plant employs almost 5,000 people

Wearside-based car giant Nissan has asked its workers to increase their pension contributions after revealing a �121 million shortfall in its pension fund.

The company, which employs 5,500 workers at its factory in Sunderland, announced it will be injecting �30 million into its final salary scheme over the next five years.

It will also be increasing its contributions from 12% to 16% of the payroll.

The final salary pension scheme is to be closed to new entrants from September, and workers were given three choices.

They can remain in the final salary scheme but increasing contributions from the present 4% of salary to 6.4% over the next three years.

An alternative is to maintain contributions at the current level and get a lower pension on retirement.

Extra years

Or they can opt for a new defined contributions scheme that will be offered to new employees from September.

Workers were also told that they could stay on an extra two years, until they were 62, or retire before 60.

Nissan is setting up a pensions "surgery" to give advice to workers at the Washington plant, which is the biggest and most productive car factory in Europe.

Almost 300,000 cars were built last year and Nissan has now been building cars in the north-east of England for 17 years.

Nissan is the latest firm to close its final salary scheme and report a shortfall in its pension fund because of falling stock market returns.

'Share burden'

A company spokesman said: "We are trying to give the workforce as much choice as possible. We are injecting a large amount of cash.

"We have identified that more needs to be done and we want our employees to share some of the burden."

Derek Simpson, joint general secretary of Amicus, said they "welcomed" the fact Nissan were consulting on changes to their pensions scheme.

Be he added: "The fact they are proposing to close the scheme to new entrants will ring alarm bells about the company's commitment to final salary arrangement.

"If Nissan want to safeguard the long term future of the final salary scheme and increase their contributions than I am sure members will agree to pay more themselves but this vague announcement appears to be the thin edge of the wedge."