Standard Life has reached a compromise with its staff after an angry reaction to plans to cut their pension benefits.
Consultation ended last week on Standard’s pension scheme for employees and staff entitlements which will not be downgraded as much as had been feared.
The firm had proposed the reforms following its demutualisation last July in a bid to reduce a scheme deficit of £200m. The deficit has since fallen to £140m and the company has backed down from plans to sever the link between past service and final salary.
From January 1, 2008, the scheme will close to future accruals on a final-salary basis.
Around 7,000 employees will then choose between ret-aining the link between past service and final-salary plus defined-contribution or definedbenefit based on career average salary.
Group chief executive Sandy Crombie said: “Balancing the need to manage the deficit and liabilities while accommodating the preference of members to retain a link between past service and final salary was never going to be easy. The choices now available provide a sustainable compromise.”