David Prosser: Aviva's pension disappointment

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Outlook Andrew Moss, chief executive of the insurer Aviva, has done some interesting work with a Government-sponsored think-tank on the future of welfare provision, producing imaginative ideas about who might deliver benefits such as pensions in the future. All the more pity, then, that Aviva's own approach to benefit provision appears to be so unimaginative.

Aviva is not the first large company to want to shut off its final salary pension scheme. Yesterday's closure announcement follows similar proposals from Barclays, Vodafone and many others. But as a leading player in retirement planning, it must know that there are all sorts of options falling short of outright closure of the scheme that it could have chosen to explore before going down this route.

It is not as if Aviva faces ruin if it keeps the scheme open – perhaps asking staff to pay more, or to retire later, or to share more of the risk. The insurer is profitable and it is not burdened with the sort of crippling pension fund deficit that companies such as BT and British Airways, for example, are trying to combat without closing down their schemes altogether.

Aviva argues that having shut the final salary scheme to new members several years ago, it now spends a disproportionate amount on these benefits, with employees in its money purchase schemes getting a raw deal. To which members of the defined benefit plan would feel justified in saying: "It was you, not us, who chose to shut the doors to new joiners."

Final salary pension schemes do not suit all employees and the decline of this sort of retirement benefit is now irreversible. But while some employers can make a fair case that the cost of their plans are unsustainable, that doesn't appear to be the case at Aviva. And if any business has the knowledge and experience to make alternative solutions work, this is it.