星空传媒

Regarding the William Sutton Trust's decision to raise its retirement age from 60 to 65 for employees who joined after April 2002 ("Southern switches to stakeholder pensions", 17 April, page 8): a retirement age of 65 is increasingly common in the housing world, particularly since the sector-leading social housing pensions scheme raised the age for new members. Increasingly less common, though, is the type of long-term commitment made by the William Sutton Trust to a final salary pension scheme.

We made the move after consultation showed that our employees' greatest fear was being at the mercy of the equities markets. The final salary scheme, which guarantees pension levels regardless of stock market performance, is a significant benefit and understandably is becoming an increasingly popular part of remuneration packages.

William Sutton Trust's solution of a raised retirement age maintains the strength of the fund and gives individuals an additional five years to accrue increased benefits for retirement. The change also means that the contribution rate is protected from the increased cost of pension provision arising from a longer lifespan than was normal 10 years ago. Employees can still choose to retire before 65, albeit on a reduced pension.

Housing associations have to take some action to control the costs of their pension funds, but closing final salary schemes is not the only option.