E-Malt.com News article: UK: Future pension arrangements for Scottish & Newcastle employees based in the UK

Following a period of detailed consultation with employee representatives, Scottish & Newcastle announced on January 19 proposals for future pensions arrangements for UK employees.

Final Salary Scheme retained for all existing members.
All employees have access to defined benefit schemes.
Non contributory pension option available for all.
Possibility of retirement at 60 retained.

S&N Employee Council played active part in review process – all their recommendations accepted in final proposals.

S&N UK will retain its Final Salary scheme for existing members. However, from April 2006 the scheme will require members to make contributions of 6% of pensionable pay, where before the scheme operated on a non-contributory basis.

Existing Final Salary scheme members will also be offered the option to join the company’s existing “Career Average Salary” defined benefit scheme - that provides employees with a choice of levels of contribution, ranging from no contribution to 6% of pensionable pay.

The S&N “Career Average Salary” scheme has been in operation for all new starters since April 2003. It provides competitive attractive benefits when compared to many other UK companies who offer only a defined contribution scheme to new employees.

“We have now begun a period of detailed employee briefings and all members of the current Final Salary scheme will be offered access to personalised illustrations, pension workshops and Q&A sessions to help them determine the most appropriate decision for their future pension provision.”

John Dunsmore, Managing Director of S&N UK, commented on the new arrangements. “It is well documented that Final Salary schemes are under threat in businesses across the UK and, indeed, our own pension fund has required significant cash injections. I am therefore delighted that we have been able to find a solution that retains the final salary scheme for those who wish to remain within it. At the same time, we can offer our employees an attractive alternative for the future. Overall, the revised pension arrangements remain highly competitive for members and are in line with TUC and other guidelines determining the appropriate ratio of employer to employee contributions.”

“I would also like to pay tribute to the role of our Employee Council, the members of which have been actively involved in framing the new arrangements. The Council has taken a highly mature and responsible approach to this issue, and the new arrangements are all the better for their involvement.”

The work of the employee council was greatly helped by the appointment of Alan Pickering CBE, a highly regarded pensions expert an independent adviser.

Alan Pickering commented, “Both the process and the outcome are a tribute to the Company and their Employee Council. Together, they have demonstrated how a co-operative and open response to the pension challenge can result in a solution which meets the needs of employees, the business and its shareholders."

Existing members of S&N’s Career average scheme are unaffected by this announcement, as are deferred and current pensioners. New arrangements will come into effect on Thursday 6th April 2006.


24 January, 2006