More pension schemes face closure

Unions have criticised the latest attack on final salary pension schemes. Insurer Aviva is planning to close two schemes to existing members to try and eliminate a £3 billion deficit.

The move would affect 5,600 Aviva employees and 2,000 staff at its RAC roadside breakdown subsidiary.

Under its proposals, members of the defined benefit schemes — commonly know as final salary schemes — will be offered the chance to join a money purchase (or defined contribution) scheme instead from April 2011.

A 90-day consultation process will begin in June with a view to closing the scheme in March next year.

Siobhan Endean, national officer for finance at the Unite general union, said: “Aviva remains a highly-profitable company and what it has done is stab hard-working staff in the back who could now lose thousands of pounds in pension benefits to live on during their retirement."

Mark Hodges, Aviva’s UK chief executive, admitted that the company was just joining the wholesale corporate desertion of final salary schemes.

“Our proposals are in keeping with the continuing trend for companies to move to money purchase schemes — these schemes are now the norm, rather than the exception” he said.

www.employeebenefits.co.uk/item/10446/23/5/3