United Co-operatives is to inject £4.2 million into its staff pension scheme as the first stage of a ten-year bid to eliminate its deficits.

The initial payment over and above the necessary contributions, follows previous additional sums over the last two years amounting to £3 million.

The £1.7 billion-turnover society owns a host of businesses including convenience stores, funeral directors, motor retailers and department stores, and employs 15,500 staff, many in the Bradford district.

Company secretary Philip Jones said the announcement demonstrated commitment to the scheme. "Our board has made it clear that, while the society remains profitable, its final salary pension schemes will be retained," he said.

"To achieve this, the board has approved proposals for a ten-year strategy to eliminate the current scheme deficit.

"This follows on from the measures already taken including increased regular contributions. The board is also determined the schemes will remain open to new employees."

But Mr Jones hit out at Government proposals in the new Pensions Act, part of which is intended to provide a safety net for members of final salary schemes in the form of a new Pension Protection Fund (PPF).

It is expected to benefit schemes at firms which slump into difficulties, such as Federal Mogul which has left hundreds of people in Bradford fearing for their pensions.

"The intentions of the Act are laudable," said Mr Jones. "But a serious concern is the fact that the Government is now trying, by the back door, to provide funding for failed pension schemes of the recent past which would be paid for from the remaining defined benefit schemes still solvent.

"This will inevitably impact on both employee and employer contributions in the future and give some employers further reason to stop supporting defined benefit schemes."

He added: "In fact, there is no provision in the Act whatsoever to give employers any incentive to support pension provision.

The simplification much vaunted by the Government as the reason behind this legislation has been lost in a welter of amendments, to say nothing of ten codes of practice and 100 regulations which have yet to see the light of day."

But yesterday the Department for Work and Pensions unveiled reforms to enable companies to promote their own schemes to employees. The changes to the Financial Service and Market Act mean any scheme to which the employer contributes can now be freely promoted.