Union anger at Aviva pensions plan

Sam WilliamsUnion chiefs have described plans by Aviva to close its final salary pension scheme as a 'stab in the back' for employees.Sam Williams

Union chiefs have described plans by Aviva to close its final salary pension scheme as a 'stab in the back' for employees.

The insurer announced this week its intention to consult staff over proposals to end final salary pension arrangements from April 1 next year, which are enjoyed by 7,600 workers.

Aviva said the plans would protect all final salary benefits that staff have already accrued, but only offer money purchase arrangements in 2011, under which employees contribute a percentage of their income to pensions which is matched or exceeded by the company.

But Unite described the move as a betrayal, and claimed a typical member of staff would see their future pensions reduced by up to a third - equivalent to the loss of three years' salary.

Unite national officer for finance, Siobhan Endean, said: 'Aviva remains a highly profitable company and what they have done today is stab hard-working staff in the back who could now lose thousands of pounds in pension benefits to live on during their retirement.

The company said the proposed changes would deliver 'competitive, sustainable pensions' for its staff and said the current arrangements were 'inequitable'.

Currently the final salary scheme takes 65pc of the company's contributions to pensions but is enjoyed by just 33pc of Aviva and RAC staff.

Louise Zucchi, head of media relations for UK Insurance at Aviva, added: 'We believe it's more responsible to give staff a good, affordable and sustainable alternative now than to continue with an arrangement that has an uncertain future.'