UK - Retail giant John Lewis is giving employees the choice of closing the defined benefit scheme to new members or having their bonuses cut.
John Lewis, which operates as a partnership, blamed rising pension costs for the fall in its interim profits.
Pre-tax profits fell to £34m from £44m while pension costs jumped 14% to £33m.
Chairman Sir Stuart Hampson said: “We continue to have non-contributory final salary pension scheme which will increasingly give us a competitive advantage in recruitment.
“However, this comes at a substantial cost and impact to our declared profit.”
The partnership’s pension cost for the whole year also rose 13.5% to £62m.
Hampson added: “This means our pension costs have more than doubled over the last five years. This is well ahead of pension costs borne by the majority of our competitors.”
The deficit under FRS17 rose from £130m at the end of January to more than £200m at the end of June.
Head of pensions Roger Dennis said: “We compare the cost of pensions to what is available to distribute to employees as bonus.
“That is the test – whether employees would rather have more bonus and an inferior pension scheme or leave things as they are. That decision will be made by the central staff council.
“They [the employees] have formed a committee that is considering the matter now and are going to report in November.”
Dennis said the management had recommended that the non-contributory final salary scheme should be retained.
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