IRELAND - The National Irish Bank is to transfer all members of its defined benefit (DB) scheme to its existing hybrid pension plan.
Under the changes, which come into effect from January 1, 2011, member contributions will increase from 2.5% to 5%, while the bank will contribute 15% a year.
The bank will pay staff a cash lump sum of 5% of salary in December in order to compensate for the first two years of contribution increases.
A spokesman said the bank had consulted with staff union IBOA about the changes and claimed the risks and costs in the DB scheme, which has been closed to new employees since 2008, had escalated to unsustainable levels.
Deputy CEO Kevin Gallen said: "We've taken a long time in reviewing our options and in consulting with IBOA. Short term measures are not a solution. Retaining the defined benefit scheme would have resulted in biting into the pension benefits already earned and wouldn't have tackled the core long term problems in the scheme. I believe that, with our new pension arrangements, we've now arrived at the best solution for our staff and for the bank"
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