Standard Life defends career-average plan
UK - Standard Life is standing by its decision to scrap its final salary scheme for 7,000 members amid allegations that they were ‘mis-sold' the career-average scheme the UK insurer plans to replace it with.
Informal proposals put to employees last November failed to win widespread support. However, in revised proposals sent to scheme members this week, the firm offered what it claimed was a better accrual rate, with pensions linked to inflation.
A Standard Life spokesman said the new proposals had taken into account "staff concerns, the strength of feelings being expressed about the proposed changes, and the feedback received".
Trade union Amicus has used the dispute to bid for official recognition. In a press statement, the union, which earlier this month organised a meeting in Edinburgh for 500 Standard Life pension holders, cited "growing concern" over pensions following demutualisation last year.
Standard Life's non-contributory final-salary scheme closed to new members in November 2004.
"I don't see signs of career-average schemes taking off, which is sad," said Richard Stroud, CEO of The Pensions Trust, who pioneered career-average schemes. "Lots of employers are just not prepared to take on the risk."
Earlier this month, the civil service became the latest pension scheme operator to ditch final-salary for career-average. It claimed the new scheme would provide equality between scheme members with different rates of salary increase and parity between long-term employees and leavers.