AMP closes off UK pension business
Beleaguered financial services giantAMPhas announced that it will close its UK pension business, NPI, to new business while continuing to manage its existing book as part of the UK Life Services (UKLS) business.
The closure, resulting in 900 staff redundancies, means that all AMP’s UK-based life companies are now closed to new business, aside from contractual increments from existing customers.
As part of its May 2003 de-merger proposal, AMP had planned to test the market for interest in NPI and assess options including sale, rationalisation and restructure.
AMP chief executive Andrew Mohl says the review has determined that the best outcome is to maintain ownership of the existing operations and run it on a closed-book basis.
He says this solution maintains service to existing customers, secures assets under management forAMP Henderson, provides scale to the UKLS business and minimises the cost of managing the NPI book.
The redundancies are in addition to those previously announced in June and December 2002, a result of the changes and “further operational improvements”.
“The decision to restructure has been a very difficult one to make, given the impact it will have on our people. We are working to mitigate this impact wherever possible,” Mohl says.
“However it is a necessary stop to ensure the new UK-based business has a solid foundation for future success, particularly given the difficult UK environment and our changed UK strategy.”
AMP says the costs related to the NPI changes have already been provided for in the estimated $260 million de-merger expenses, included in the May 2003 announcement.
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