Aegon has announced it will close its defined benefit (DB) pension scheme to future accrual for its employees from April 2013.
It has entered into consultation with employees and unions Aegis and Unite over changes to the pension scheme.
The move is part of Aegon's restructure and cost-saving programme. The scheme has been closed to new members since March 2003.
Aegon is offering employees membership of its group personal pension (GPP) instead. Half of its workforce is already part of the GPP.
The insurer has proposed cuts to GPP from April 2012 as well. Aegon has suggested calculating employer contributions using basic salary only, rather than including fluctuating earnings such as bonuses and overtime.
The consultation will last 60 days from 14 November.
Aegon UK chief executive Adrian Grace said: "The financial risks in running a DB scheme are becoming ever greater and there is a growing trend for employers to move from DB to defined contribution (DC) pension arrangements.
"It is no longer commercially sustainable to keep our scheme open to future accrual and maintain the link to final salary."
Running two different pension schemes created disparities which meant employees were not rewarded on an equal basis, he said.
'Right thing to do'
£69m spent on upgrades
European fintech market 'underserved'