UK - Retail giant John Lewis is to review its pension arrangements. But the partnership insists there is no intention to close its final salary scheme.
Last week the group announced a 5% fall in group profits from £149m to £141m.
And later this year the staff council – a body which is 80% elected by John Lewis employees and meets six times a year – will discuss the future of pension arrangements at the firm.
John Lewis Partnership Pensions Trust's head of pensions Roger Dennis said: The council might decide it wants to make some changes to the scheme to save money but equally it might well decide it wants to improve the scheme.
There is no plan on the part of senior management to change the final salary arrangement,which they believe will increasingly be a major attraction in recruiting staff. The staff council is unlikely to want to scrap something that is such a benefit to staff.
John Lewis’s staff council has a major say on pension arrangements with any changes needing its agreement, as well as that of the John Lewis main board.
John Lewis said it was not intending on implementing FRS17 until next year. The last valuation of the £1bn fund by actuaries Watson Wyatt showed a deficit of £69m, which led to a modest increase in the contribution rate last year, from 9.8% to 10%.
Total contributions last year on behalf of the 40,000 active members was £63m.
The pension fund has this month moved to a more defensive position, reducing its UK equity allocation by 5% to 45%, and increasing both the bond and property portfolios by 2.5% to 12.5% accordingly.
Western Asset Management run the boosted bond portfolio and Knight Frank manage property for John Lewis.
Dennis said no manager changes were contemplated. He pointed out that all were relatively new appointments except equity managers Baillie Gifford.
Watson Wyatt advises the scheme.
By Alistair Graham