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Final-salary changes confirmed by insurer

Standard Life has confirmed plans to switch staff with final-salary pension schemes to schemes based on their average salary to reduce its pension deficit.

The changes to the defined-benefit scheme, which closed to new members in November 2004, will affect around 7,000 staff.

Many have reacted angrily to the proposals, originally mooted last November, with Amicus currently rallying support from staff to challenge the reforms.

Retrospective changes have proved particularly controversial. These affect members of the DB scheme who chose to sacrifice salary from November 2004 onwards to continue to receive a 1/60th final-salary scheme.

They will now accrue benefits from November 2004 to December 2007 on an average-salary basis, still based on 1/60th.

Despite criticism of the retrospective changes, a Standard spokesman insists they still represent good value for money as the sacrifice was phased in over three years.

Standard Life launched a 90-day consultation period with staff on January 22 but a spokesman says it will only look at average-salary arrangements.

The spokesman says: “Any proposals put forward have been run past our lawyers and we are confident that they will stand up to any legal challenge.”

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