Employees win fight to keep final salary pension
UK - Standard Life employees appear to have won their battle to maintain the final salary pension scheme benefits for existing members.
The Edinburgh-based life assurance group has been in consultation with 7,000 employees since January after proposing to change its non-contributory final salary defined benefit scheme to one which paid out benefits based on each member's revalued career average salary (RCAS).
A spokesman for Standard Life Assurance today said proposals now going to the group's board of directors, following the closure of the staff consultation, mean staff who are already members of the final salary pension scheme will continue to receive their retirement benefits based on their final salary.
"We believe what has been delivered addresses the management of the ongoing liabilities of the scheme and critically reintroduces the link for past service to final salary that has been a key concern particularly for longer serving staff members," said Scott White, director of communications at Standard Life.
"A strong, open and active ongoing representation from the Staff Association has been core in shaping this. The solution which will be taken to the Standard Life board for approval reflects the views and opinions of scheme members. What Standard Life entered into was a consultation process which allowed its people to influence the thinking and decisions taken by the Executive team," added White.
The company has been keen to stress it has responded to employee concerns through discussions with staff associations, and makes no mention of unions' attempts to intervene in talks.
Employees launched a public media campaign in January this year, with the help of trade unions - despite Standard Life's insistence it did not recognise the role of the unions - to try and prevent the final salary terms from being changed.
Staff are said to have threatened legal action with the support of the unions if proposals were pushed through by SLA as they were concerned about the losses in benefits long-term staff, in particular, would face.
Employees who joined the company since the end of 2004 can enrol in the defined contributions RCAS, a scheme which is already operating under "the same future terms we are moving too", said White.
He believes the company has "listened and delivered an enviable package, against a landscape of huge social, economic and regulatory change that millions of workers throughout the country would be hugely attracted to".
The company had first vowed to address the £200m (€292m) pension fund deficit in April 2006 when it issued its initial price offer (IPO) document for the listing of Standard Life on the London Stock Exchange.
That deficit has now reduced to £140m, according to Standard Life.
Other proposals presented by the group also mean further changes are still being applied from January 1 2008 which mean members will no longer receive 1/60th accrual through salary sacrifice.