American Express has suspended employer contributions into its occupational pension scheme in a move to cut costs.
The financial services firm, which employs around 6,000 staff in the UK, has announced that it will halt the contributions for up to 18 months from 1 July to maintain profitability in the economic downturn. Previously 3% of an employee’s salary was put into the scheme and contributions up to 6% were matched by the employer.
A spokesperson at American Express confirmed that the majority of its staff are in the stakeholder scheme, while only a small number of employees remained in its final salary scheme, which closed to new members in 2006. Employer contributions have been suspended across both schemes.
The spokesperson said the firm made the decision reluctantly, and will look closely at the business and economic environment to identify whether it will be possible to lift the suspension before January 2011.