AROUND 3500 Clydesdale Bank employees are set to lose out on their pensions with a new scheme that offers poorer returns.

The National Australia Group (NAG), which owns the Clydesdale Bank and Yorkshire Bank groups, has proposed a series of initiatives to address the deficit in its three defined pensions schemes as part of its ongoing strategy to inject new life into its UK operations.

The main emphasis of the reforms is to address the defined benefit schemes’ increasing shortfalls—which have a collective deficit of £426 million.

From the beginning of April, this will mean a change from the final salary pension to a scheme that links benefits to the average salary of an employee during a period of service, which will operate at less cost to the company.

The proposed changes will not affect entitlements accrued before April 1.

A one-off contribution of £100 million will be made by the NAG, which will result in a reduction in benefits for bank workers, although the changes are being defended as being good for employees in the long term. The proposals were developed following a lengthy and detailed review, which included consultation with the schemes’ trustees, the trade union Amicus and other employee representative groups.

The reforms will be put next month to a ballot of the 8000 members of the three defined benefit schemes, including the 3500 people in the Clydesdale Bank plan and 1500 members of the defined contributions scheme.

Bank chief operating officer David Thorburn said the proposals were designed to put UK pension arrangements on a secure and sustainable footing and were part of the work to boost UK operations.

He added, “We have conducted a broad review that considered all the options available to put pensions on a secure footing.

“We considered all the options available to us and believe the proposals for reform, including the one-off contribution of £100 million, to be fair and equitable and to provide a balance between the needs and expectations of scheme members and the long-term viability of the schemes.”