Daily Mirror (Northern Ireland)
GRAHAM HISCOTT Reinvention of pension? Giant’s prized scheme under threat
HIGH street giant John Lewis is to consider closing its prized pension scheme for staff.
The worker-owned firm has kicked off a review, with “all options on the table”.
The department store and Waitrose owner is the last big retailer, and one of a handful of large companies, still offering a sought-after defined benefit pension.
However, changes introduced three years ago included making staff – or “partners” as they are known – wait five years before they can join.
Despite that, the deficit in the scheme had grown to £731million, on one measure, by January this year. The review, which will be approved by a council of workers, could see the final salary scheme close to future accruals.
Pensions expert John Ralfe said: “The review is likely to recommend closing the scheme altogether and moving to a defined contribution pension.
“The question then is how generous it would be.”
It comes after the John Lewis Partnership cut its annual bonus to 5% of workers’ salaries earlier this year after annual profits plunged more than two-thirds.
The firm yesterday warned profits in the first half of its year would be “close to zero”.
Annual profits are set to be “substantially lower” than last year, it added.
Plans were also confirmed to sell four small Waitrose stores to the Co-op and one larger shop to Aldi.
The business also set out its longer-term vision, including having even more ownbrand products and relying on its famed customer service.
Stores will also be rebranded John Lewis & Partners and Waitrose & Partners to highlight the importance of its staff.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, warned that the current tough trading for retailers “isn’t a blip, it is a major shift”.
However, he claimed its planned investment meant it would succeed in the long term.