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Aon slashes pension contributions by half
8 Apr 2009The UK arm of insurance broker Aon will cut its contributions to staff pensions by up to half - paving the way for other large firms to do the same.
Employees will be forced to pay up to three times the amount they do now to ensure Aon matches its current payments, leaving staff with less take-home pay.
Aon, which has 5000 workers in the UK, said it was the first large firm to take such action in Britain and experts warned it could encourage other employers to follow suit.
Aon chief executive Peter Harmer said that while some staff would see it as a salary cut, it was preferable as a cost-saving measure to shorter working weeks or unpaid sabbaticals.
"For some staff there will be less take-home pay," he said. "But this gives us more compensation to pay for performance. It is clear that not everyone values benefits in the way they value salaries."
Employers around the country are struggling to afford final-salary schemes. David Yeandle, head of employment policy at the EEF, said: "There is a herd instinct with pensions. If one or two big companies [cut contributions], others will too."
Reader views (1)
Just waiting for the plethora of Emails demanding that public sector pensions be cut, or abandoned altogether, to fall in line with the private sector pension woes. The article above mysteriously misses out the fact that AON employees are currently only required to contribute 2% of their salaries into the pension scheme,(a common figure in private industry)whilst we in the public sector have been contributing a compulsory 6%-11% for a number of years. Neither have public sector employees been able to benefit from years of annual profit share scheme's, company share schemes, free medical insurance and cheap loans and mortgages. These are just a few of the fringe benefits provided by large private companies that have never been available in the public sector. Many in the private sector have always looked down on public sector workers, but now that their gravy train has come to a shuddering halt they want those of us in the public sector to suffer equally!!.
- Pat, South of England, 08/04/2009 15:42
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