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Daily Insurance Industry News
Monday 19th of February 2018
April 20, 2010

Aviva to ditch final salary pension scheme

by Gill Montia

Story link: Aviva to ditch final salary pension scheme

Aviva to ditch final salary pension scheme

Aviva is proposing changes to its UK staff pension arrangements for employees of both Aviva and the group’s RAC business.

The insurer has been reviewing its pension commitments in light of the future funding requirements, and wants to switch 7,600 staff from final salary benefits to money purchase arrangements, from 1st April 2011.

Under the proposals, the final salary benefits already built up by staff will be protected and there will be no changes for retired and deferred members.

Around 14,000 of the group’s workers are already members of its money purchase scheme, and the insurer argues that the change would produce a unified, equitable and sustainable approach to pensions.

Discussions are underway with the Trustees of the final salary scheme and a 90-day consultation process is expected to begin in June.

The Aviva and RAC final salary pension arrangements currently have a combined deficit of around £3 billion, compared with an estimated £1 billion deficit in 2006.

 

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