UK - Insurance giant Axa (UK) and trade unions have been forced to make major concessions to end a row over the firm's final salary scheme.
Axa has bowed to union pressure and scrapped plans to raise the scheme retirement age.
But the unions have been forced to accept the closure of the £2.2bn scheme to new members and an increase in member contributions.
From October 1, non-contributory members of the final salary scheme will be expected to contribute 2.5% of their salaries into the plan to keep their current 1/60th accrual rate and retirement age of 62. And after 12 months this contribution rate will increase by a further 2.5% of salary.
For those members who do not want to start contributing, a contracted-in, non-contributory final salary scheme with a 1/100th accrual rate will be set up.
The unions – Amicus MFS and Unifi – have successfully retained a clause in the scheme rules which states that members of the defined contribution scheme that have been with Axa for more than 10 years can transfer their pension into the final salary scheme.
Earlier this year, the firm – which owns Axa Investment Managers – said it would be introducing measures which would control costs in the face of falling investment returns, increased longevity and changes to the tax regime.
The firm suggested that unless members gave written consent to these changes they would be removed from the final salary scheme.
Amicus MFS accused the insurer of “holding a shotgun to employees’ heads” while Unifi threatened to ballot workers on industrial action.
But following four months of negotiations, Unifi national secretary, insurance, Terry Keefe said the dispute had been “resolved” to the satisfaction of both sides.
And Amicus north-west regional officer Hugh Jones-Glass said: “This shows that with dialogue things can be resolved, rather than companies trying to impose things and having to back down later on with egg on their faces.”
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