7,600 Aviva employees ‘could lose thousands’ in pension proposals
20th April 2010
Aviva ‘betrays employees who built up the
group’, says Unite
Aviva, the UK’s largest pension provider, has been accused of
‘stabbing employees in the back’ over new pension proposals that
could see thousands of pounds wiped off retirement incomes.
Unite, the largest union in the country, said that Aviva,
formerly known as Norwich Union, had betrayed the very staff who
built up the group over their future pensions when it unveiled
plans today (Tuesday, April 20) to end its final salary pension
scheme.
Aviva, which also includes the RAC, intends to consult with
staff with the intention of introducing money purchase arrangements
for all employees from April 1, 2011.
Currently about 14,000 UK Aviva and RAC employees have money
purchase pension schemes and 7,600 employees have final salary
arrangements.
Unite national officer for finance, Siobhan Endean, said: ”Aviva
remains a highly profitable company and what it has done today is
stab hard-working staff in the back who could now lose thousands of
pounds in pension benefits to live on during their retirement. It
is a betrayal as employees regard a final salary scheme as deferred
pay for years of loyal service.”
Unite calculates that a typical member can expect to see the
pension they earn in future reduced by a third and their overall
career pension reduced by a fifth. The reduction in the pension
paid during their retirement will be equivalent to the loss of
three years of their current salary.
Unite officer for Aviva, Bernadette Fisher, called for
‘meaningful talks’ with the company: ”As the UK's biggest pension
provider, it is quite shocking that Aviva should be looking to
plunge thousands of its own staff into pensions' insecurity at this
difficult time.
”Aviva made profits of more than £1.1 billion last year and has
more than enough resources to maintain the framework of a final
salary pension. Closure is the most drastic solution possible to
address the size of the scheme’s deficit.“
Unite said that most other financial services companies have
looked at alternative ways of reducing costs further, such as:
- salary capping
- reducing accrual rates
- increasing the normal pension age
- capping of future increases in pensions
- higher optional member contributions.
Bernadette Fisher said: ”Those close to retirement would be
badly affected by the current proposals as the benefits in any
defined contribution scheme take many years to accrue, making it
near impossible for them to build up a decent pension during their
final critical years of employment.”
ENDS
Notes to news editors:
For further information, please ring: Unite national
officer for finance, Siobhan Endean, 07979 806545; Bernadette
Fisher, Unite officer for Aviva 07739 302870, Shaun Noble,
communications officer 020 7420 8951 or 07768 693 940.
