National Australia Bank (NAB) has announced that its UK subsidiaries, Clydesdale Bank and Yorkshire Bank, are set to terminate their final salary pension schemes.
NAB is following an increasingly well worn path, with Rentokil Initial and ScottishPower among other blue chip firms to recently close their UK final salary schemes.
NAB says it is facing a pensions hole of some GBP426 million, and that the move to a career average scheme would mean overall employees’ benefits would be more secure. However the bank admitted that some staff could lose out.
At present NAB is still consulting staff on whether to proceed, but insists that the changes are necessary and is offering a series of alternative inducements to persuade employees to back the changes. Among them, NAB pledges to retain retirement at 60, but is to offer staff the opportunity to work to 65 in return for enhanced pension provision.
NAB’s plans are however likely to face strong opposition in Scotland and northern England, where its Clydesdale and Yorkshire operations are based: both banks have suffered the sting of branch closures and job cuts in recent times.