NESTLE workers in the region are being told today of plans to make major changes to the company pension scheme.

Nestle proposes to close the defined benefit pension scheme - commonly referred to as a final salary pension scheme - and replace it with a defined contribution scheme.

The move affects all 7,600 members of the Nestle UK pension scheme, and involves many of the firm's 2,700 staff based in York and Newcastle.

In 2010 the KitKat and Yorkie maker introduced the option of a defined contribution scheme for employees, while continuing to offer a defined benefit scheme. In a statement today, Nestle said: "Unfortunately, the costs and risks of providing a defined benefit scheme have continued to increase substantially in recent years. With regret the Company is therefore proposing its closure and replacement with one of the most attractive defined contribution schemes available."

There are 620 people employed on the Nestlé site at Fawdon, Newcastle where brands including Rolo, Rowntree’s, Munchies, Toffee Crisp, Blue Riband, Breakaway, Caramac, Matchmakers are produced, and 2,115 people at York, where KitKat, Yorkie, Aero, Milky Bar and Polo are made.

Dame Fiona Kendrick, the chief executive and chairman of Nestle UK and Ireland said: “We realise that these proposed changes will cause concern for employees who are building up defined pension benefits in the Nestle UK Pension Fund, or are eligible to do so. We are very sorry that we have to propose these changes but under the circumstances we believe it is the right option.”

Nestle bosses will now enter into consultation with staff and trade unions and said it will give "careful consideration to their response to the proposed changes before any final decision is made".