Pension schemes for Aviva employees have been given a lifeline as the company announces strong growth for the first quarter of 2010.
First quarter investment sales at Aviva, formerly Norwich Union, increased to over £1 billion, and general insurance and health premiums rose to £2.5 billion, showing a 16 per cent improvement on the previous quarter.
The news comes as Aviva agrees to offer funding to help bridge the deficit in its final salary pension scheme, which was facing closure and threatening around 7,000 employees’ retirement savings.
Aviva has agreed with the trustees of its final salary pension scheme that it will contribute £365 million to bridge the reported £3 billion shortfall.
This follows uproar after Aviva announced in April that it planned to consult staff in June about closing its final salary scheme to existing members in favour of a money purchase scheme.
Andrew Moss, chief executive said: “We have agreed a long-term funding plan with the trustees of Aviva’s main final salary pension scheme.
“The combination of our contributions and the proposed closure of the scheme to future accruals should eliminate the deficit over time.”
Speaking about Aviva’s first quarter growth Mr Moss said: “This is an encouraging start to the year. Europe and the UK are the primary engines for Aviva's growth today, accounting for 85% of our long-term savings sales in the first quarter.
“Sales have recovered and we've seen strong performances across our portfolio of life, general insurance and asset management businesses, compared to the previous quarter.
“Our capital position remains strong and this second quarter of growth bodes well for the rest of the year, even though there is still a degree of economic uncertainty in a number of markets.”
© Fair Investment Company Ltd