UK - Department store chain Debenhams is expected to take the unusual step of closing its fully funded £500m final salary scheme in November in a bid to protect itself against volatile investment returns.
A Debenhams spokesman said the firm had invested £70m in the scheme in the past couple of years, to achieve a fully funded status.
Given the uncertain climate going forward in term of investment returns and volatility of returns, we think it more prudent to close that [scheme] and protect the position as it is, he said.
He conceded it was unusual that a scheme in good shape would close, but added: We want to be sure it remains that way, basically.
Debenhams is currently in a two-month consultation process on the issue, but the spokesman said: The plan is for it to take place. There has been discussion with trustees already, but the proposal must be discussed first.
If approved, the scheme will be closed to new entrants from November 1 2006, and existing members will be moved to a DC arrangement where the company will match payments made by employees going forward.
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