Staff were informed by letter on Monday that as of 31 March 2002 the firm is to close the scheme. It has been closed to new members since 1 April 1997. They will now join all new entrants to the firm in a defined contribution scheme.
The news comes just months after senior E&Y managers were angered by the firm’s decision to cancel last year’s profit participation payouts.
An insider told Accountancy Age|: ‘For those within the pension scheme this was a major part of our remuneration package and in some way helped to bridge the gap between the salary package on offer at E&Y and the larger packages available at other firms.’
The firm said its decision was not due to cost, but ‘a desire to reduce risk’. The whole pensions industry is currently undergoing radical change due to, among other factors, increased life expectancy, lower interest rates and reduced returns on equity markets.v But many UK employers have either ended final salary schemes or plan to do so. Few have stopped their schemes for existing holders.
A spokesman for E&Y said: ‘The firm has worked closely with our actuaries to come up with a new set of arrangements for individuals that is fair and provides a comparable level of benefit.
‘By taking these actions now we are acknowledging the risks and uncertainty and acting in the best long-term interests of the firm and its people.’
James Trask, actuary at Lane, Clark and Peacock, said: ‘It’s drastic to shut down future accruals. DC is unlikely to be as generous as existing schemes.’
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
Six new partners have been revealed by top ten firm Mazars