UK - Retail giant Woolworth's has raised the retirement age of staff to 65 in a bid to keep its £165.2m final salary scheme open to new members.
The scheme – which is barely a year old – has an FRS17 deficit of £134.8m and employee contribution rates are being increased to plug the gap.
Employees will have the option of either paying 5% in contributions for a 1/80th pension or 7% for a 1/60th scheme from next April.
New members will have to complete a year’s service before joining the scheme and will receive the lower accrual rate.
Woolworth’s made the changes despite increasing its contribution rate to the scheme from 12.6% in February to 13.5%. The scheme was launched in April 2002 following Woolworth’s’ demerger from Kingfisher – owner of electrical retailer Comet. Deferred members and pensioners remain in the £992m Kingfisher scheme.
Chairman Gerald Corbet said: “The board considers the scheme a powerful tool for recruiting, retaining and rewarding staff.
“As no preexisting pensioners transferred on demerger, the scheme’s membership largely consists of contributing active members with an average age of less than 42.”
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