The UK arm of insurance broker Aon is cutting its employer pension contributions by as much as half as part of an overhaul intended to drive down costs and protect its business during the recession.
Aon's proposal, which includes a two-month consultation with staff, involves moving to a lower standard employer contribution and will affect up to 5,000 of its staff working in the UK.
Peter Harmer, CEO of Aon UK, acknowledged that many companies are looking at ways of reducing their fixed costs through pay freezes, reduced hours, four day weeks and enforced sabbaticals on greatly reduced levels of pay but said his firm would not be looking for a short-term fix.
"We recognise times are hard for employees, but we believe in taking a different, longer term view," Harmer said.
"This approach recognises that employees want to retain their pay to allow them to make choices. By offering a lower standard contribution while offering matched contributions, we are seeking to reduce fixed costs whilst saying to employees who regard saving into a pension as a priority, "If your retirement provision is important to you and you are prepared to invest in it, then we will back you and invest in it, too".
The move by Aon comes at a time when other brokers are finding ways to reduce costs.
Last year Aon and March, the insurance broking arm of March and McLennan, both announced job losses. Earlier this year it became know that Willis had offered staff unpaid leave in an attempt to cut costs.