UK - Retail giant John Lewis is to retain its £1.2bn final salary pension scheme.
But it will introduce a five-year delay on new employees joining the scheme.
The decision by the partnership’s elected central council backs proposals made by an internal staff committee which was set up to find ways of reducing pension costs.
The partnership’s last interim report blamed reduced profits on pension costs. Its scheme deficit rose from £130m at the end of January to more than £200m at the end of June.
The proportion of the partnership’s profits used as pension contributions increased from 8% in 1997 to 10% last year. And last year – for the first time – the £62m paid into the pension scheme exceeded the total paid out – £58m – directly to the partners through the company’s profit-sharing scheme.
However, John Lewis central council member David Jones said: “We were unanimous in wanting to preserve the partnership’s final salary pension, which we saw as one of the key differences between the partnership and other companies.”
The council has also agreed to reduce the discount taken from pension payouts to allow for the state pension in order to provide higher pensions for lower-paid staff.
Personnel director Dudley Cloake said: “At a time when many companies are closing their schemes, I am delighted that the partnership will continue to provide a final salary scheme for our people.”
He believes John Lewis is now probably the only large retail company with a non-contributory pension scheme for its staff.
The secretary of state for work and pensions has told MPs clawback and avoidance measures could be imposed for the people responsible for driving Carillion over the cliff.
Occupational pension provision has continued to grow in value, but there remains large variance in incomes across the pensioner age group, according to latest government data.
Defined benefit (DB) schemes could have an aggregate surplus by 2021 under Pension Protection Fund (PPF) projections, its strategic plan for 2018 to 2021 reveals.
Investment consultants are failing to recommend products that outperform net of fees, the Competition and Markets Authority (CMA) has said as its investigation into the market continues.