The John Lewis Partnership has announced plans to close the defined benefit (DB) section of its combined pension scheme.
The parent company to John Lewis & Partners and Waitrose & Partners currently operates a hybrid scheme, combining its defined contribution (DC) and DB schemes.
The closure of the DB section, which has 44,000 active members, to future accrual was approved by the retailer's Partnership Council yesterday (15 May), following a year-long review and consultation.
The council comprises 58 democratically-elected members representing the views of partners across the business, and the decision was unanimous.
Changes to the scheme, which is chaired by Jane Newell, will take effect from April 2020 with all partners having access to an "improved" DC section of the scheme.
The DC structure will provide matching contributions of up to 8% of pay and an additional 4% after three years' service at the partnership, regardless of whether or not an employee pays into the scheme.
With the partnership having closed a number of department stores across the country after profit warnings, the DC scheme structure is designed to be more affordable, as well as to support its aim of improving financial sustainability. The change is expected to save around £80m in annual pension costs and ensure a more equal distribution of profits among partners.
Every month, several firms issue trackers of the aggregate defined benefit (DB) scheme funding position. See here for the June 2020 estimates on the various measures…
Marian Elliott looks at the three questions trustees should ask to understand the route to endgame.
Close to £10bn was transferred out of defined benefit (DB) pension schemes in the last quarter of 2019, according to figures from the Office for National Statistics (ONS).
FTSE 350 companies with defined benefit (DB) pension schemes have been hit particularly hard by the economic crisis caused by Covid-19, latest research from Barnett Waddingham shows.
Bank of England (BoE) governor Andrew Bailey is understood to have warned against superfund consolidation of defined benefit (DB) pension schemes less than a week after the entities were given the green light by The Pensions Regulator (TPR).