Motor breakdown and insurance company RAC has won a ‘pension scheme of the
year’ award just weeks after a review of its final salary offering.
While other businesses are closing final salary schemes to new employees in
a bid to save money, RAC retained the benefit and even extended it to employees
aged under 25.
The company has restructured its scheme and has taken steps to significantly
reduce its current deficit.
It increased company contributions, and asked members to increase their
contributions to protect the future of the scheme. Forty-five per cent of
employees in the scheme agreed to raise their contributions to keep their
future pension unchanged.
David Dugan, RAC group pensions manager, said: "Our final salary scheme
is an important part of the way we attract and retain high-calibre colleagues.
"We have taken the opportunity this year to drive major changes in the
way we fund and communicate our pension commitments. We are confident the
changes will protect the long-term future of our scheme for the benefit of all
Currently, 60 per cent of RAC’s 6,500-strong workforce are members of the
final salary scheme.