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Daily Insurance Industry News
Friday 27th of April 2018
April 8, 2009

Aon cuts employer’s pension contribution

by Gill Montia

Story link: Aon cuts employer’s pension contribution

Aon cuts employer’s pension contribution

Aon’s UK division is proposing to cut the contribution it makes to employees’ pensions as part of a cost reduction strategy.

The firm has already closed its final salary scheme and according to a BBC report is now proposing to reduce the level of its employer contributions by up to a half.

Aon has been contributing 12% of employees’ pay into the company’s pension plan and this could now be reduced to a standard employer contribution of 6%.

However, some employees may have their contributions matched, up to a certain point.

Staff who are scheme members will therefore receive less in the way of monthly pay but the insurer and pension provider says it is opting for a long-term solution to cut its fixed-costs rather than a short-term fix, such as a pay freeze or reduced working hours.

The firm’s UK division employs around 5,000 staff and Aon is believed to be the first major UK employer to be cutting its pension contribution in response to credit crisis losses and the economic slowdown.

 

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