UK - The National Australia Group, which owns Clydesdale Bank and Yorkshire Bank, has announced plans to tackle its £426m UK deficit by replacing its three UK defined benefit schemes with a career average structure, effective from April.
Under the proposed structure, plan members would earn “blocks” of pension every year, instead of receiving a pension based solely on their final salary at retirement. The year-on-year blocks would be based on the member's annual salary.
Another proposal designed to help reduce the UK deficit is the revision of age-related benefits under the National’s existing defined contribution scheme.
Members would receive a core employer contribution of 5%, and up to an additional 5% in matched contributions, bringing the overall level of employer contributions to 10%, regardless of age.
The National’s Europe chief executive Lynne Peacock said the proposed initiatives were part of a strategy to revitalise UK operations.
The proposals were accompanied by National’s announcement that it would make a one-off contribution of £100m across its three DB schemes this financial year.
A spokesman for the National said the deficit across the three schemes currently stood at £426m. Following the implementation of the proposed initiatives, this was expected to be reduced to £190m, he said.
The 8000 members of those three DB schemes, including 3500 in both the Clydesdale Bank and Yorkshire Bank schemes, and 1000 in the National Australia Bank scheme, will vote on the proposals between February and March, alongside the 1500 DC scheme members.
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