HSBC Proposes U.K. Pension Changes

June 10, 2008 ( - HSBC is proposing changes to the pensions of its 58,000 staff in Britain, who could see the retirement age raised to 65 from 60 and a third of workers asked to contribute to a final-salary pension program.

According to a Reuters news report, the proposals by Europe’s biggest bank, as HSBC pointed out, were being advanced because people are living for longer and every extra year’s life expectancy adds £340 million to the liabilities of its pension plan.

The bank said it would also beef up its defined-contribution program, used by the remaining two-thirds of workers, by stepping up its own contributions.

The bank said it wanted to improve benefits for staff to help it attract and retain employees and the changes would cost it an extra £54 million next year.

Staff can still retire at 60, but the amount of final salary paid would be reduced to account for it being paid before 65.