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The Financial Services Authority (FSA) has given a fifth of its staff a 10% pay rise to compensate them for the closure of its final salary scheme to existing members.
A total of 495 staff were told last month that they would no longer be able to contribute to the pension scheme, according to The Sunday Telegraph, and would be moved into a defined contribution scheme.
The staff will instead be offered discretionary pay rises of 10%.
A FSA spokesman told The Sunday Telegraph: ‘Following a consultation, a decision was made to close this scheme in March 2010 and affected staff will move to a money purchase pension scheme
‘This is part of our aim to move all FSA staff on to a common pay and reward platform rather than operating two systems as currently happens.’
He added: ‘To reflect the impact of this change in benefits, final stalwart staff will receive a 10% salary uplift as part of the new terms.’
The increase in salary is sure to bring further criticism of the FSA, which fell into the red this year for the first time, spending £347 million but raising just £324 million in fees and levies.
Its annual report also showed it had extended its overdraft facility to £200 million but still paid out £19.7 million in bonuses to staff in April.