Power firm bucks final-salary trend

Earlier this month the French state-owned energy company Electricité de France (EDF) - which owns London Electricity, Seeboard and SWEB - announced details of a new final salary pension scheme for its UK employees.

Public services UNISON welcomed the scheme as the first "to be launched in Britain in recent memory", going against the tide of companies closing such schemes to cut costs.

The company says it plans to bring more than 6,000 of its 11,300 workers into a single final salary scheme.

UNISON's head of business and environment Mike Jeram said: "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."

Vincent de Rivaz, chief executive of EdF Energy, said: "Pensions are a long-term investment and we are determined to make a long-term commitment to our employees."

The scheme gives employees options. A contribution of 4% of pensionable pay gets a pension worth 1/80th of pay for each year worked.

Higher accrual rates of 1/70th, 1/60th and 1/50th are available with contribution rates set according to age. For example, the 1/60th option initially costs a 16 or 17-year-old 5.5% of salary but this rises by a tenth of a percentage each year or so. At 35 the contribution rate is 6.6% and by 55 it is 9.1%.

EDF pays the balance of the cost of the scheme which will initially be 10% of pension able pay.