Royal Bank Of Scotland Group PLC Tuesday confirmed plans to cap increases in the pensions of more than 60,000 workers at 2%, joining the raft of U.K. companies acting to cut soaring pension fund liabilities.
The government bank will also be reducing the lump sum payable on early retirement for plan members who choose to take an immediate undiscounted pension.
"This is an expensive scheme for our shareholders to fund and a generous one in comparison to the market," said Neil Roden, head of human resources at RBS, after a BBC television report.
RBS is just one of the several U.K. companies reviewing their support for defined-benefit pension plans, where companies agree to pay employees a fixed sum on retirement and which were designed to provide a sufficient income for past employees.
Many have already been replaced with defined-contribution plans.