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Barclays’ payout ‘a drop in the ocean’

Barclays’ cash payout to members of the final-salary pension scheme it plans to close to future accruals has been dubbed “a drop in the ocean”.

Barclays has agreed to make a cash payout worth 5 per cent of salary to staff after its decision to close its final-salary pension scheme to future accruals angered employees.

Chief executive John Varley has also offered to delay the implementation of the proposed changes by four months to April 2010, which will allow employees to build up extra accruals, and announced plans to pump £500m into the scheme.

Varley outlined the measures in a letter to staff last week following threats of strike action and protests outside a shareholder meeting.

Unite, the trade union planning the action, said that Barclays members were “incensed” by the original proposals.

Varley wrote that he appreciated the “strength of feeling” among staff during a two-month consultation period.

He added: “I know that I have asked a lot but I am certain that what we are doing here is right.”

Pensions expert Ros Altmann says: “The £500m injection is no use to members whatsoever. Obviously, the longer that Barclays delays, the more members can accrue but the cash payouts are an absolute drop in the ocean compared with the loss of benefits members are facing. But if Barclays gets away with this, then I think that other firms will try.”

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