Prudential is closing its final salary pension scheme to new employees – the
latest big company to do so.
The insurance giant said it needed to close the scheme to new members
because of concerns over its cost. It is replacing it with a ‘defined
contribution’ plan which will see workers bear the investment risk.
Despite unions decrying the move, the company maintains that its new scheme
– which includes a more generous sickness benefit and allows for career breaks
and part-time work – offers employees a better deal.
"We are introducing a high-quality defined contribution plan and
believe it should become a benchmark against which other quality defined
contribution schemes will be measured," a company spokesman said.
Prudential now joins a long list of companies which have restricted their
final salary schemes. These include Abbey National, HBOS, HSBC, AstraZeneca,
and Marks & Spencer.
In a separate move, Prudential announced it is to give its staff a day each
year dedicated to sorting out their personal finances.
HR director Russell Martin said: "We have to find ways to encourage
people to take this issue more seriously. I believe that if we can provide them
with more time during the working year, we shall see an improvement in this
area." The offer will be open to all 8,000 UK staff, and starts next year.
Prudential staff will be allowed to use an intranet site on financial
planning information and tools, as well as in-house seminars for workers and,
if possible, their partners.
They can choose to use the time to visit their bank or building society or
use the office’s telephone, internet and computer facilities to resolve their