Thursday, June 4, 2009

Barclays pensions scrapped

"We promise to pay you your pension money back when you retire"..... :)"

What a joke!
You worked your butt off for your 100 M US$ salary boss and this is how they treat you?


It would be interesting to see what the reactions of the Brits will be: submissively heading for the slaughter house like employees in the US or kidnap their boss ("boss napping") like they do in France
.

17,000 staff to lose final salary benefits but US investment bankers exempted.

Telegraph

Barclays is withdrawing gold-plated pension benefits from all its staff except 1,500 investment bankers based in the US, including Bob Diamond, the bank’s president and best paid director.

The bank on Wednesday unveiled plans to shut its final salary scheme to existing members. The move will affect 17,000 staff, but exclude roughly 1,500 of its top earners. Affected members will retain benefits accrued to date but earn future entitlements under Barclays’ “Afterwork” defined contribution scheme, which does not link retirement payments to salaries. Actuaries estimated the move would save Barclays about £150m a year.

Mr Diamond, who is among Britain’s best-paid bankers after earning £21m in 2007, is in a separate US pension scheme that has been closed to new members but not to existing staff. Barclays said the US scheme was not affected because the bank had only undertaken “a UK pensions review”.

It is thought Barclays will move to shut down other final salary schemes to existing members, but has outlined no plans to date.

The US scheme is “non-contributory”, which means it is entirely funded by the bank, and guarantees members an annual pension of up to $175,000 (£110,000). The annual report shows Mr Diamond currently has a £280,000 pension pot that will pay him £45,000 on retirement at the age of 65.

Rob MacGregor, national officer of union Unite, said: “There will be deep anger among the staff. Unite views this proposal as a break in the promise by Barclays that they will not put profits before people. This attack on the pensions of the loyal and hard-working staff at the bank is utterly alarming.”

John Varley, Barclays’ chief executive, said the decision was taken because the current arrangements were “untenable”. In a letter to staff, he explained that the UK scheme, which was closed to new members in 1997, had a £2.2bn deficit in September that “is likely to have worsened”.

Barclays’ staff will be better off than employees of other companies that have shut their scheme to existing members, such as Rentokil and

WH Smith. John Ralfe, an independent pensions consultant, said: “The Afterwork scheme is more generous and less risky for individuals than typical defined contribution schemes but nothing like as good as they’ve been getting.”

Barclays’ annual report shows that servicing the final salary scheme cost £299m last year. Actuaries estimated the bank would save about half that amount, though Mr Varley said: “Our intention is to reinvest any one-off savings from the proposed changes into [reducing the deficit].”

John Ball, at actuaries Watson Wyatt, said: “We anticipate more high-profile closures over coming months... we are working with many who think this could be the year they bite the bullet.”

Separately, Barclays’ Abu Dhabi investor, Sheikh Mansour bin Zayed al-Nahyan, followed his sale of 1.3bn Barclays shares on Monday by offloading £1.25bn of capital instruments. Credit Suisse sold them for a £12.5m profit, adding to his £1.45bn gain on the stock. It also emerged that Temasek, the Singaporean investment fund, offloaded its £1.2bn Barclays stake in December, crystallising a loss of about £500m.

Barclays’ biggest shareholder, Qatar’s sovereign wealth fund, which sold 35m Barclays shares in April, said it remained “supportive” of the bank.

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