FINANCE NEWS: Oxfam closes final salary pensions for new staff recruits

Oxfam has become the latest charity to close its final salary pension scheme to new employees.

The charity blamed a combination of increased costs and new accounting standard FRS17 for the change following a year-long review.

As an interim measure, from early next year new employees will be offered an improved stakeholder scheme. Oxfam will pay double the employee's contribution to a maximum of 10 per cent.

But Oxfam will review the arrangement at the end of 2003. Rewards manager Frances Richardson said: "This is a swing from a scheme where the employer bears most of the risk to one where the employee does," she said. "We would have preferred ideally a scheme that shared the risk but there aren't any suitable products at the moment."

She said that FRS 17 was the deciding factor in the switch.

It requires charities to keep sufficient reserves to cover the pension fund deficit and this would take money away from charitable activities.

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