JOHN LEWIS is set to make cuts to its generous pension scheme, one of the few non-contributory final-salary schemes left in the country.
The department store group, which also owns Waitrose supermarkets, launched a review of its pension scheme in March last year after revealing that the deficit had ballooned to £840m.
The draft proposals published yesterday would see John Lewis switch to a defined benefit and defined contribution hybrid scheme in which part of workers’ pensions would be linked to their final salary and part would depend on contributions.
The scheme will have a “reduced accrual rate for future service” and new partners will also have to wait five years, instead of three, to join the scheme.
Nat Wakely, director of the pensions benefit review said: “The John Lewis Partnership pension is a defining element of our business. We are determined that it should remain so while ensuring that the scheme is sustainable for the long term.
“The draft proposal maintains a non-contributory defined benefit pension but at a reduced accrual rate which then enables the contributory defined contribution pension to be extended throughout a Partner’s whole career,” he said.
The proposals will be put to staff and voted on by the end of the year.