Northern Rock has proposed to close the final salary section of its pension scheme as it prepares to be sold by the government.
The bank also plans to cut up to 650 jobs as part of its restructuring process in preparation for a return to private ownership.
Members of the final salary pension scheme will be offered future membership in the money purchase section of the scheme. Northern Rock has proposed to improve the terms of the money purchase section of the scheme.
Gary Hoffman, chief executive of Northern Rock, said: “We remain in public ownership and it is important that we continue to deliver value for taxpayers.
“There is still a challenging economic environment and in order to meet our objectives, we must align our staffing level to match the smaller size of the business, increase efficiency and reduce our cost base. Regrettably, this will involve a reduction of up to 650 jobs.
“We have entered a formal consultation period with Unite, and other employee representatives, during which we will discuss how we can achieve that.”
Rob MacGregor, Unite national officer said: “The decision by Northern Rock management to cut over 20% of its workforce and alter the pensions of the remaining staff is devastating. Such massive changes represent a total reappraisal of the service the bank provides to its customers.
“The scale of these job losses and pensions changes will be a painful process for every one of the 4,500 staff at the bank. Unite will be doing everything we can to save the jobs and future of Northern Rock.”
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