Barclays has announced plans to close its final salary pension scheme to almost 18,000 existing members.
Long-serving employees who joined before 1997 will no longer accrue benefits from the scheme. A hybrid arrangement consisting of a cash balance scheme, or a defined contribution (DC) scheme will be offered in its place.
In a letter to Barclay's staff, group chief executive John Ralfe, said he had reluctantly come to the decision to make the changes as the current scheme was untenable. A the funding update taken at 30 September 2008 showed the defined benefit (DB) scheme's surplus had become a deficit of £2.2billion.
A Barclays spokesperson said: "Given the current economic situation, managing costs, including pension costs, is one of our top priorities. It is in the best interests of all Barclays employees and shareholders for us to do so. Accordingly, we are reviewing our pension arrangements within the UKRF [Barclays Bank Retirement Fund] to ensure that they are appropriate for colleagues and for Barclays."
Rob MacGregor, national officer at union Unite, said: "The attack on the pensions of the loyal and hard-working is utterly alarming. The union is urging the bank not to establish the change."