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Old 27th Dec 2007, 08:57
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WHBM
 
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The normal approach is to close the Final Salary scheme to new starters, but leave it running for existing members. That way nobody feels any issue and it gets accepted.

Given the normal turnover in companies, in maybe five years time less than half the workforce have been there for longer than that time, so the final salary employees are now in the minority. Plus the FSS pension trustees will then have to state that they are running out of funds (inevitable as there are no new employees coming along and the company will have given up and attempt to "top up" the scheme to keep it going). So the trustees can only propose to take their remaining funds and convert them into a Money Purchase scheme. And because the affected staff are now a minority in the company, those recent starts with lesser pensions will not feel at all inclined to support them.

All a plan devised by investment bank advisers in The City; you know the ones, those who when they are let go for non-performance have very different contracts which mean they have to be paid off with about 2 years' salary.
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