Morrisons axes final salary scheme

MikeJones_2

Hot on the heels of announcements by BP and Barclays already this week, supermarket chain Morrisons has confirmed that it will seek to close its final salary scheme. See:

- Morrisons axes final salary scheme

It's a sad week for defined benefit pension provision in the UK...

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

EdInvestor

They are moving from final salary to career average, perhaps not quite as bad as it looks.

The Barclays scheme was non-contributory, a total freebie. And they get mega bonuses as well!

No need to shed too many tears there, either IMHO.

MikeJones_2

Hi EdInvestor,

EdInvestor wrote: »

They are moving from final salary to career average, perhaps not quite as bad as it looks.

Agreed, with 'quite' being the operative word there from the majority of the members' perspective.

EdInvestor wrote: »

The Barclays scheme was non-contributory, a total freebie. And they get mega bonuses as well! [/QUOTE]

According to the Jeremy Vine show today on BBC Radio 2*, which featured defined benefit schemes (12.00 noon until 12:35pm), the average Barclays employee earns around £14,000 p.a - £17,000 p.a. so they might not all enjoy mega bonuses...

* (the link is to BBC iplayer and the section of the programme relating to defined benefit schemes starts at 7m 20s)

EdInvestor wrote: »

No need to shed too many tears there, either IMHO.

I agree with your sentiment if you are comparing a CARE scheme with a money purchase scheme.

But if you are comparing a CARE scheme with a final salary scheme there are situations which I suspect the majority of scheme members affected by the proposed changes might not be quite so familiar with. Here's a couple of examples.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.