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.
This week's Pensions Buzz respondents were mostly in agreement that 10 weeks is an appropriate length of time to conduct a full DB to DC transfer.
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