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| Axa plans to axe final salary pension scheme | |
| (34 minutes later) | |
| Financial services group Axa has announced plans to close its final salary pension to existing members, in a move one union claimed would result in employees having to work an extra five years to achieve the same retirement pay out. | Financial services group Axa has announced plans to close its final salary pension to existing members, in a move one union claimed would result in employees having to work an extra five years to achieve the same retirement pay out. |
| The company told staff it planned to move 2,300 employees currently in the scheme to a defined contribution pension, where payments are not guaranteed and depend on the performance of the underlying fund. These schemes are cheaper to run as the investment risk is transferred from the employer to the employee. | The company told staff it planned to move 2,300 employees currently in the scheme to a defined contribution pension, where payments are not guaranteed and depend on the performance of the underlying fund. These schemes are cheaper to run as the investment risk is transferred from the employer to the employee. |
| In common with many other firms Axa, whose business is providing pensions alongside other financial products, had already closed the final salary scheme to new members. Since 2003 they have been enrolled in a defined contribution scheme. | In common with many other firms Axa, whose business is providing pensions alongside other financial products, had already closed the final salary scheme to new members. Since 2003 they have been enrolled in a defined contribution scheme. |
| "We have worked hard to maintain our defined benefit (final salary) pension scheme over the past few years and have introduced a number of changes to try to keep the scheme sustainable," a spokesperson said. "Like many other companies before us, we are now proposing that the scheme be closed pending a further 60 days of consultation." | "We have worked hard to maintain our defined benefit (final salary) pension scheme over the past few years and have introduced a number of changes to try to keep the scheme sustainable," a spokesperson said. "Like many other companies before us, we are now proposing that the scheme be closed pending a further 60 days of consultation." |
| Benefits that have already been accrued in the scheme will be kept. The spokesperson added: "This allows us to harmonise pension arrangements in a fairer way across our employee base and ensure that all of our employees have access to long-term pension provision." | Benefits that have already been accrued in the scheme will be kept. The spokesperson added: "This allows us to harmonise pension arrangements in a fairer way across our employee base and ensure that all of our employees have access to long-term pension provision." |
| Unite, Britain's biggest union and the representative for Axa staff, expressed anger over the plans and said it could not rule out industrial action. It said it had put forward a range of alternatives including possible changes to members' contributions or accrual rates, but these had all been rejected by Axa. | Unite, Britain's biggest union and the representative for Axa staff, expressed anger over the plans and said it could not rule out industrial action. It said it had put forward a range of alternatives including possible changes to members' contributions or accrual rates, but these had all been rejected by Axa. |
| Unite's national officer, Dominic Hook, said: "The move to end the defined benefit pension scheme at Axa is appalling and unjustified. Long-serving staff now face the prospect of having to work an extra five years to get the same level of pension and [the move] puts all the investment risk on to the staff." | Unite's national officer, Dominic Hook, said: "The move to end the defined benefit pension scheme at Axa is appalling and unjustified. Long-serving staff now face the prospect of having to work an extra five years to get the same level of pension and [the move] puts all the investment risk on to the staff." |
| He added: "The decision by Axa is unacceptable and industrial action will be among the options being discussed with members if Axa refuses to reconsider its proposals." | He added: "The decision by Axa is unacceptable and industrial action will be among the options being discussed with members if Axa refuses to reconsider its proposals." |