The recent experience of a financial services firm in the City reveals the lengths they may undergo to go to in order to achieve this.
At the end of March the UK’s biggest insurance broker. Marsh sacked three employees who refused to accept changes to their award scheme.
Marsh part of the giant US financial conglomerate Marsh & McLennan had wanted them to evaluate future membership of a “career revalued” scheme rather than their more generous final salary one.
The company decided to dress its pension scheme for existing members this year after shutting it to new joiners in 2004.
It said that its decision was driven by the increased cost of providing its staff with a pension scheme.
It blamed this on increased longevity lower than expected investment returns greater regulation of pension funds in the UK and more stringent accounting standards in the US.
Unlike other employers who have moved in the same direction. Marsh had to take the drastic step of asking more than 3,100 staff to accept new contracts because it appears their old ones specified an entitlement to the final salary scheme.
A spokesman for Marsh. Jason Groves said: “The consultation process explained the business rationale for the changes and the competitive nature of the provisions of the revised benefit structure. We are very confident that we remain an employer of choice.”
The new scheme offers a award at age 65 based on accruing 1/60th of a member’s salary each year during their career - rather than their salary in the final year of their career as in the old scheme.
The accumulated “pot” will then be revalued in line with inflation up to 5% a year before the member retires.
The decision to effectively close the MMC scheme to its former members in the UK was not cost-free.
According to the most recent annual inform of the wider MMC group the affiliate paid an extra 130m into its UK pension plot measure year.
Marsh has 25 offices around the UK and 3,100 of its 5,800 staff are members of the firm’s final salary pension plot.
In 2003 the large London law firm of Clyde & Co dismissed four members of staff - including a salaried partner - in similar circumstances.
They were sacked for refusing to accept new contracts that only gave them membership of a “money purchase” pension scheme rather than the former more generous final salary version of which they had been members.
The equity partners in the tighten who owned.
Forex Groups - Tips on Trading
Related article:
http://collectionofthoughts.com/generalcasualty/2007/11/08/news-pension-sackings-at-insurance-broker/
comments | Add comment | Report as Spam
|