American Express suspends pension contributions

by Gill Montia

Story link: American Express suspends pension contributions

US credit card company, American Express, has suspended employer’s stakeholder pension contributions for its 6,000-strong UK workforce, from 1st July.

The company is withdrawing its financial support for the next 18 months in a move that some argue amounts to a pay cut.

The stakeholder scheme involves staff contributing 3% of salary and the company matching this by up to 6%.

In a statement, the firm has pledged to lift the suspension no later than 1st January 2011 and to keep employees informed as to whether the date can be brought forward.

Profits at the group tumbled by more than a half in the first quarter of 2009 as spending by card holders continued to slow and repayment defaults mounted.

However, the company did receive a clean bill of health when US authorities stress tested financial institutions back in May.

The decision to suspend the contributions follows Barclays’ announcement in June that it plans to close the bank’s final salary scheme.