AA abandons final salary pensions for new starters

The AA motoring organisation has closed its final salary pension scheme to new employees, but denied union claims that it has stopped the benefit for existing staff.

The news that new staff would no longer receive a final salary pension was announced by AA chief executive, Tim Parker, at a meeting in London yesterday.

The GMB union said benefits to existing members would also be cut as the final salary calculation will no longer include all elements of earnings such as bonuses and overtime.

The union statement came after Parker expressed surprise that the scheme included payments such as overtime and bonuses, which he believed was not normal practice.

But a spokeswoman for the AA denied that Parker would be changing the scheme for existing members.

New employees are being offered a defined benefit scheme which has been in place for management for the past two years, she added.

The GMB, already in dispute with AA over job losses, said it would consult its members before deciding on its next move.

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