Financial services group, Axa, has announced that it plans to close its final salary pension to existing members and transfer 2,300 staff currently in the scheme to a defined contribution pension,.
It has been revealed that Axa has told staff it will embark on a 60-day consultation period over its plans before “proposing the scheme be closed”. The move has angered one particular union, which claims that the move will result in employees having to work an extra five years to achieve the same retirement payout.
Unite, Britain’s largest union, has called the decision “appalling and unjustified”, and has vowed to challenge the company’s plans. It stated that it has not ruled out an industrial action ballot to persuade the company to think again.
Axa had already closed the final salary scheme to new members and since 2003 has been enrolling staff in a defined contribution scheme. A spokesman said:
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“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.
“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 amassed in the scheme will be kept, and the spokesman 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’s National Officer, Dominic Hook, commented on the plans:
“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.”
