The pension scheme at Royal & Sun Alliance (R&SA) has been saved after staff agreed to reach a compromise with their employers.
R&SA staff agreed to switch their struggling existing final salary scheme to one that is dependent on average pay throughout their career at the company, a move which cut the scheme's pension deficit by around £126 million.
While this will see their pensions cut significantly, more than 80 per cent of workers agreed to the switch.
The move is expected to prevent trustees from switching to a money-purchase pension plan.
Tom McPhail, pension specialist at Hagreaves Lansdown, a financial advisory firm, believes the decision be used as template for solutions at many company final salary schemes which are struggling with huge deficits.
Mr McPhail told This is Money: "A company may want to remove the burden of its final-salary scheme but not want to go the whole hog and switch to the money-purchase option.
"This offers them a compromise and it should become more common as more final-salary schemes close." To read more about pensions, click here.
© Adfero Ltd