Power firm makes final-salary pension commitment

In contrast to much of the gloom around pensions, the French state-owned energy company Electricit‚ de France (EDF) last month announced details of a new final salary pension scheme for its UK employees.

EDF owns three utilities - London Electricity, Seeboard and SWEB - and wants to boost pension scheme membership among its employees, particular younger workers, by offering the new scheme.

"This is very good news," said UNISON's head of business and environment Mike Jeram. "EDF is to be commended for taking a longer-term view of pensions and for ensuring all employees - current and future - can look forward to a decent pension when they retire."

The scheme will be launched next year following consultations with workers.

Members will be able to choose four different levels of contributions and benefits with a basic level of 4% of pensionable pay buying a pension based on 1/80th of pay for each year of service.

Higher accrual rates of 1/70th, 1/60th and 1/50th are also available but contribution rates will be higher and will be related to the age of the scheme member. So, for example, a 35-year-old wanting the 1/60th rate will pay6.6% of pay, rising gradually to reach 7.7% by age 45 and 9.1% by age 55.

The company will pay the balance of the cost of the scheme which will initially mean the equivalent of 10% of pensionable pay for each member.

The company hopes that the new scheme will prove attractive to the 3,000 younger employees who currently have no pension provision.