Royal Bank of Scotland (RBS) has announced plans to close its final salary pension scheme to new employees later this year.
New staff will be given a 15% salary ‘uplift’ to compensate for not being eligible to join the pension plan. Current employees can remain in the scheme or receive 15% of their salary to invest in other savings programmes.
RBS said the move would give staff “increased choice and flexibility” for their pension and claimed that it would cost the firm roughly the same as the current scheme.
The bank has 90,000 employees in the UK and there are currently 225,000 members in its pension scheme. There will be no change to arrangements for RBS pensioners and deferred members.
Over the past few months, many firms have shut their final-salary pensions or cut benefits for employees.
Neil Roden, group HR director at RBS, said: “It is important to stress that for existing staff if they do nothing, nothing changes. But a one-size-fits-all solution is no longer appropriate for the demands of a 21st century workforce.”