UK - Aegon is to close its final salary scheme to new members from April 1 due to falling markets and rising liabilities.
Members of the non–contributory £311m Aegon UK Staff Retirement and Death Benefit Scheme have also been told they must start making contributions of 1.25% – to rise to 5% by 2005 – to keep their 1/60th benefits.
Without member contributions they will receive 1/80th benefits.
Members who do not wish to start making contributions will also be given the option of joining a money purchase scheme, which will be open for new employees in April.
Aegon group public affairs manager Scott White said: “It is still very much a considerable and valuable staff benefit but the economics of today mean that, in terms of funding, lower returns and increasing longevity, it all adds up to a very challenging time for final salary schemes.
“What we are offering members is still very much the Rolls Royce of pension arrangements.
“But Rolls Royce’s use up a lot of petrol, so we are looking for member contributions to go towards that petrol.”
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