Shell to close final-salary pension scheme

Friday 06 January 2012 01:00

The oil giant Shell came under attack yesterday after announcing it is closing its final-salary pension scheme to new workers.

The Unite union condemned the move, saying Shell was "turning the screw" on workers.

Shell is one of the last companies in the FTSE 100 to offer new staff a final-salary pension scheme, which provide staff with guaranteed pensions based on their length of service and their pay when they retire.

But from 2013, the oil giant plans to offer new staff a so-called defined contribution plan, where the company only commits to contribute a set amount into a pension scheme, leaving the pension that staff ultimately receive dependent on the markets.

Unite's general secretary, Len McCluskey, said: "This is a disgraceful act – nothing less than greed on the part of one of the world's richest and most powerful corporations. They have no need whatsoever to close this scheme and in the process deny their employees the safe retirement they were promised they could save for.

"Shame on Shell, for where they lead, other corporates will follow."

A Shell spokesman said: "The company is proposing to develop a UK defined contribution pension plan for new hires to Shell to reflect market trends in the UK.

"Timing is proposed to be quarter one, 2013. The plan will be designed to ensure that the reward package in the UK for new hires remains strongly competitive.

"Current active members, deferred members and pensioners of the Shell Contributory Pension Fund and the Shell Overseas Contributory Pension Fund are not impacted by this proposal."

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments