The Royal Bank of Scotland (RBS) recently announced that it would be making changes to its Final Salary Pension Scheme.

At the moment staff have received a fifteen percent contribution from the bank and have not needed to contribute the it themselves. However, they have been told that should they wish to retire at the age of sixty then they will be required to make their own contributions of five percent. Refusal to do so will mean that they cannot retire at sixty and shall have to wait until sixty five.

In addition, to asking that employees in the scheme make some personal contribution to their fund, staff have been told that the earliest age at which they can retire will rise from fifty to fifty five years old. Like most schemes of its kind, RBS's Final Salary Scheme has been closed to new members since 2006. Such schemes are simply too expensive for employers to run, often causing them to become practically insolvent according to statistics. Pay outs to existing scheme members were capped in 2009.

The decision to ask for a five percent contribution has been met with resistance from the union Unite, who say that it will be too expensive for most to manage. "With 28,000 workers receiving no pay rise this year, these changes will make access to the pension scheme unaffordable for many." They further condemn the actions of the bank as increased evidence of their lack of consideration and thanks for the bank's many staff working in the branches and back offices up and down the country. Unite hope to convince the bank of the need for some round table negotiations rather than simply enforcing the changes with no consultation whatsoever.

An RBS spokesman explained that "the changes announced today are essential to ensure that the group can afford to sustain the Final Salary pension scheme given the continued improvements in life expectancy. This also brings us in line with other UK banks and many other companies who have already increased the normal retirement age. We will be consulting on these proposals with Unite." As news of strikes over pensions becomes a frequent feature of our news it makes sense that some changes have to be made if we are to make the best of the situation. Without some changes, pension schemes and in particular, Final Salary pension schemes will simply be unworkable. Like many Final Salary pension schemes RBS's is currently in deficit so much so that the bank has committed to injecting £400 million a year into the pension scheme until 2018 in order to help alleviate the situation.

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