Charles ends final-salary pensions
PRINCE Charles has closed a generous final-salary pension scheme to new workers on his Duchy of Cornwall estates. Future recruits will no longer be able to join the fund, which can pay out two-thirds of salary as a pension, ensuring a comfortable retirement.
Instead, new employees will be forced to rely on a cheaper and much riskier scheme linked to the stock market.
The decision comes at a sensitive time for the Prince, following the revelation that his annual income has soared to £13m - nearly £10m from the Duchy and £ 3m from the Government.
Recently, he has tried to insist that he lives frugally - a claim met with widespread derision.
Insiders at St James's Palace suggest that a stock market-linked stakeholder plan will be set up for new recruits, with between 12% to 15% of their salary contributed into the plan.
Although the workers will not be compelled to pay into the scheme, they may have to do so if they want the same level of benefits as colleagues in the final-salary plan.
Around 80 Duchy employees currently in the fund will continue to enjoy the benefits of a salary-related pension.
A spokesman for the prince said: 'The Duchy of Cornwall continues to offer employees a generous contribution to pensions, but this is a commercial decision as a result of declining stock market returns.'
The decision to close the Duchy's final-salary scheme to future staff follows similar moves by several major British companies - many of which face huge deficits in their pension funds.
Some firms have replaced these guaranteed payout schemes with less attractive plans that take all the risk away from the employer and put it on the shoulders of staff.
Workers pushed into stakeholder or money purchase plans have to rely on the vagaries of the stock market to provide them with a decent sum for their retirement. But there is no guarantee about just how much the pensioner's income will be. Over the last few years, the stock market has dropped by more than 30%.
