STANDARD Life has unveiled plans to close its generous career-average salary pension scheme to new contributions - cutting future retirement provision for nearly 3,000 loyal employees.

The pension arrangements of the two executives on the Edinburgh-based life and pensions giant's board, David Nish and Keith Skeoch, are not affected by the planned cuts in provision for general staff, announced yesterday. Chief executive Mr Nish receives 30 per cent of his £810,000-a-year basic salary as a pension allowance, in cash. Mr Skeoch, head of Standard Life Investments, receives 25 per cent of his £450,000 basic annual salary as a pension allowance. Mr Nish's total remuneration in 2013 was £4.05 million.

A spokesman for Standard Life said the current cost to the company of providing each year of future pension under the revalued career-average salary scheme, for the 2,975 active employees who are members of it, was about 30 per cent of these workers' total salaries.

These employees were in this Standard Life Staff Pension Scheme, which is in surplus, before it was closed to new members in November 2004, and have not had to make contributions to it because it is wholly-funded by the company.

These staff members, who will have their existing benefits protected, will be offered the chance to join Standard Life's defined contribution scheme. Retirement benefits from defined contribution schemes are based not on salary but on the amount of money put into the pension pot by the employee and employer and the return on this. Such schemes generally offer far lower retirement provision than defined benefit arrangements based on final or career-average salaries.

Standard Life's defined contribution scheme, with 2,500 employees, offers staff an employer contribution of nine per cent of salary.

From April 16 2016, Standard Life plans to "enhance" the defined contribution scheme for all its UK employees to introduce an additional employer contribution, by matching employee contributions up to five per cent. And it intends to enhance the employee payments made by an additional 10 per cent. It said an employee contributing five per cent through monthly salary sacrifice would receive a company contribution of 14.5 per cent.

Standard Life's staff associations, Bridge, which takes in employees of the fund management arm, and Vivo, signalled dissatisfaction with the pension proposals.

The Standard Life spokesman said, before 2012, the cost of maintaining the revalued career-average salary scheme had been 20 per cent of active employees' combined salaries. He added that the cost was projected to rise to 40 per cent by 2015. It is understood Standard Life expects to save about £16 million annually as a result of the changes.

The Standard Life Staff Pension Scheme, based on final salary until it was changed to the career-average arrangement in January 2008, has 9,900 ex-employees whose pension from the scheme is yet to come into payment. It also has 2,775 former staff who are in receipt of a pension from the scheme. These two groups will be unaffected by the proposed changes.

In a joint statement, Bridge and Vivo said: "We expect the consultation (on the pension changes) to take full account of the financial strength of the company, the very significant scheme surplus and the impact on this group of employees before reaching a conclusion.

"The company proposal includes an improved offering for our people in the defined contribution pension scheme. Our view is this too will fall short of expectations."