Reward Management. An employer which was moving from the final salary scheme towards the money purchase scheme is for example Unilever. Since 1.1.2008 they opened the new pension scheme. The employees were quite discontented and they went on strike.

retirement pension of 40 %. Moreover they had no guaranteed pension anymore. A further example is Avira which also quit their final salary scheme in April last year as a result that their deficit tripled in the past years. So they wanted to provide a sustainable pension for their employees. Avira also asserted that the final salary scheme was only beneficial to one third of their employees. As two-thirds were accounted of its contribution to staff pension arrangements, which was a untenable and inequitable position. But as the employees have to take the risk at the money purchase scheme, the employer has to help the employee to cope that risk.  Hence to avoid any employee dissatisfaction, the employer has to build trust by convincing that their pension won’t be affected much on retirement. But they also have to keep that promise or otherwise the trust between the employer and employees’ relationship will be destroyed and this could also have effects on the work motivation. Besides with the money purchase scheme the employees rather have a better control on their pension fund investments because that scheme is more transparent and the members can see where their money is invested and their charges.  Moreover the money purchase scheme is more portable and the employees have the opportunity to take their contribution with them to their next employer. If anything this is not possible at the final salary scheme without any circumstances. In order to work efficient in an economy the factor mobility is vitally. Because an employee leaves, he immediately loses a vast amount of his pensions’ value. But the final salary scheme is proposed for long-serving employees as employees who leave early often get disadvantaged as the prices are linked to the benefits and not the earnings.But on the other hand when a company is providing the final salary scheme have to be aware of the fact that it will have to take the financial risk for this pension. But if the cost will be higher than expected the employer also will have to absorb that. As a result in recent years the defined benefit pension, like at the final salary scheme, which is based on the years of service and the amount they earning, have become rarely. The increasing longevity and the poor stock market performance have made them more expensive to offer from an employer. So certainly the companies are looking forward to set up the money purchase or average salary pension scheme because they will have to contribute less. Like at the final salary scheme they are incurring the risks and contributing about 16 per cent. Comparing to the money purchase scheme where the contribution is just 6 per cent. Furthermore many experts believe that nearly any company will provide the final salary pension scheme.  Bibliography Micheal Armstrong, 2007, A handbook of employee reward management and practice 2nd ed. , page 277-280 Nick Silver, the trouble with final salary pension schemes, Economic Affairs, Dec2006, Vol. 26 Issue 4, p 53-54Welcome to the Unilever UK Pension Fund Website, accessed 5.03.2012http://www.myupfpension.co.uk/Richard Wachman, Unilever faces further strikes after pension scheme closure, published 7.01.2012, accessed 6.3.2012http://www.guardian.co.uk/business/2012/jan/07/unilever-strikes-pension-closure  Hilary Osborne, Aviva to shut its final salary pension, published 20.04.2010, accessed 7.03.2012 http://www.guardian.co.uk/money/2010/apr/20/aviva-shut-final-salary-pension-schemeFinal Salary Schemes, last updated 7.04.2011, accessed 07.03.2012 http://www.thisismoney.co.uk/money/pensions/article-1585157/Final-salary-pension-schemes.html