Aviva to close final salary pension scheme

Apr 20 2010 By Holly Williams

INSURANCE giant Aviva today announced plans to shut the group’s final salary pension schemes in a blow to around 7,600 UK employees.

The group, which also owns the RAC motoring group, said it was to begin consultation in June with a view to closing its final salary pensions to both new and existing members from April 1 2011.

Aviva closed its pension scheme to new entrants nine years ago, but the RAC pension scheme, which has around 2,000 members, is currently open to new members.

Aviva stressed that retired and deferred members would not see any changes, while it will ring-fence contributions built up so far in the final salary schemes so that only future accruals from both new and existing members would be switched into the so-called defined contribution scheme.

Aviva is the latest major employer to shut its final salary scheme altogether as pension liabilities soar.

Barclays announced the closure of its scheme to accruals from existing members last June on the same day that BP said it was shutting the door to new members for its 69,000-strong pension fund.