Severn Trent proposes pension changes

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Workers at Severn Trent are being consulted over proposals for existing pensions to be replaced by one new defined contribution scheme.

The water company said it did not believe the current situation was sustainable for the long-term financial health of the business.

The proposed changes would safeguard the benefits its pension scheme members had already built up, it added.

Changes would be introduced no earlier than April 2012, the firm said.

'Increasing volatility'

Severn Trent, which has more than 6,000 employees, will consult from June for three months.

Chief executive Tony Wray said it was not proposing changes "lightly".

He added: "Increasing longevity and an increasing volatility of future costs is making it difficult for us to plan future pension costs.

"The changes we are proposing would safeguard the benefits our pension scheme members have already built up, whilst actively encouraging everyone to save for their retirement, backed by company contributions."

The company said it was proposing to automatically enrol new employees into the new pension from 2012 and automatically enrol those workers not currently members of a Severn Trent scheme from 2013.

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