UK - Merrill Lynch is to close its final salary scheme and offer staff a flexible benefits package in its place.
The investment bank – which owns Merrill Lynch Investment Managers – closed its UK final salary scheme to new members. It now plans to move members of the £310m final salary plan into its DC scheme and launch a flexible benefits plan in September once all employees are on an equal footing.
Around 25% of Merrill’s UK employees are active members in the final salary scheme and sources say after the switch, DB members’ existing entitlements will continue to be linked to final salary.
Merrill sources say the contribution levels for all members transferring to the DC scheme will remain at their current DB levels.
The maximum contribution Merrill makes to the DC scheme is set at 18%.
One Merrill source said: “Quite a lot of people are moving to DC and everyone at ML will be on the same footing. This is a precursor to offering a flexible benefits scheme further down the line. The aim is to introduce this when everyone is on a DC basis.
“With people coming out of the DB scheme, there are generous transition arrangements. If you’re going to do this, it is better to do this at the bottom of a bear market rather than the top of a bull market.”
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