The Scotsman

New plans to let firms cut final salary pension pay

- By GAVIN CORDON

Financiall­y “stressed” businesses could be allowed to cut final salary pension payments to employees to save them from collapse, under government proposals.

Ministers have concluded that while there is no overall problem with the affordabil­ity of defined benefit schemes, maintainin­g contributi­ons could prove “unsustaina­ble” for some firms.

A government green paper set out a series of proposals to ease the pressure, including allowing struggling businesses to “cut or renegotiat­e” pensioners’ benefits.

One option could be to allow firms to suspend annual index-linked rises or peg them to the consumer prices index measure of inflation rather than to the usually higher retail price index, which most schemes are tied to.

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