John Lewis And Waitrose To Cut Pensions
Published on Jan 31 2014 2:52 PM in Retail
In a bid to cut costs, the John Lewis Partnership is scrapping its final salary pension scheme.
The Group, which owns John Lewis department stores and the Waitrose supermarket chain, is the last major retailer to operate a final salary scheme.
Proposals have been made that the accrual rate – which the final salary payment is based on – should be reduced and current staff will be expected to contribute towards the scheme through a defined contribution scheme, which leaves less risk with the company.
John Lewis launched a review of its pension scheme in March 2013 after a valuation found it had a deficit of £840 million. The company, which is owned by its employees, agreed to make a payment of £85 million into the scheme this month on top of annual contributions of £44 million a year under a 10-year plan to eliminate the deficit.
Other changes include tying pension increases to the Consumer Price Index inflation measure, capped at 2.5%, rather than the higher Retail Price Index.
The pension proposals will now be discussed by John Lewis employees with a final plan expected to be voted on towards the end of this year.
© 2014 - European Supermarket Magazine by Enda Dowling