Shell shuts FTSE 100's last final-salary pension scheme

THE death knell of the final-salary pension scheme has been sounded with the news that oil-giant Shell will become the last FTSE 100 company to close its scheme to new employees.
 
Jamie Dunkley of The Daily Telegraph says the move is "highly significant". According to the National Association of Pension Funds, less than a fifth of such private sector schemes are now open to new members, compared to 88 per cent ten years ago.
 
The Shell scheme is regarded as one of the best run in the country. It has assets of £13bn and has a surplus of more than £1bn. It makes payments to around 30,000 people and has around 6,500 workers making payments. But from 2013 new employees will no longer be able to join, although a new defined benefits scheme will replace it.
 
The oil-giant's decision comes after other major British companies including Tesco, Diageo and BP closed their schemes. In 2010, insurer Aviva shut down its final-salary scheme to all, including existing members.
 
The news has been jumped on by observers from both sides of the political fence.
 
The Guardian quotes Len McCluskey of the Unite union, which has campaigned against public sector pension cuts. He said: "This is a disgraceful act, nothing less than greed on the part of one of the world's richest and most powerful corporations."
 
He added that Shell had no need to scrap the scheme.
 
But Matthew Sinclair of the Taxpayers Alliance told The Sun that if big pensions were not affordable in the private sector then it proved that the public sector pension strikes were wrong.
 
"As the population ages, everyone is having to be realistic about the costs of providing for so many pensioners. Taxpayers shouldn't be asked to pick up the bill for pensions far more generous than they enjoy themselves," he said. ·