04 August 2006
Debenhams has announced that it plans to close its fully funded
final salary pension scheme to both new and existing members later
this year.
In a letter to members of the pension scheme, Rob Templeman, the
chief executive of Debenhams, admitted that the "uncertain climate
of low investment returns and volatility" had forced the company to
decide that the "status quo is no longer a viable option".
Under the proposals, existing members of the fully funded scheme
will stop accruing future benefits on 31 October, and the scheme
will close to new entrants on 1 November. Although existing members
would keep the benefits which they have accrued to date, all future
pension saving would have to be made within a less generous defined
contribution scheme, into which Debenhams would only match staff
contributions up to 5 per cent of their salary.
The company said that it would consult employees, unions and the
pension scheme's trustees over the next couple of months, but it
planned to shut down the existing scheme to all members as it had
become too expensive.
