27 June 2008
Retailer John Lewis is allowing new staff to join its final
salary pension scheme two years earlier than normal.
Going against the flow of employers closing access to their
final salary pension schemes, staff at the John Lewis group have
voted to reduce the waiting period to join the scheme from five
years to three years. While new staff wait to join the final salary
scheme, which is non-contributory, they can pay into a money
purchase pension scheme. John Lewis will match its staff's payments
into the new scheme up to 6% of pensionable pay. The changes will
be backdated to February of this year.
John Lewis have said that the changes will increase the cost of
the pension scheme to £90m a year. The 68,000 staff, who are
partners in the company, expect to share the extra cost in the form
of a smaller bonus pot available this year.
While this is good news for the staff of John Lewis, this change
is not likely to set much of a precedent for other employers with
final salary schemes. The John Lewis group is unusual in that it is
owned by the staff, who are partners in the business, and is not
answerable to shareholders.
The Guardian
