The John Lewis Partnership plans to halve the accrual rate for its final salary pension scheme and extend the defined contribution (DC) section of its hybrid scheme.
The retail organisation, which employs 86,000 people across the John Lewis and Waitrose brands, will make the amendments effective from April 2015 for new employees and April 2016 for existing employees.
It will introduce a reduced rate of 1/120th for its defined benefit (DB) scheme and extend the the waiting period before staff are eligible to join the DB section of its hybrid DB/DC scheme for new employees from three to five years.
The organisation will also extend the length of time that matched contributions up to 4.5% will be made from three years to the full length of an employee’s service. In addition, DB pension members will receive 3% of their contractual base pay each month on a non-contributory basis toward their DC pots.
John Lewis first announced a review of its scheme in March 2013. It is part of the organisation’s plans to remain fair to employees and affordable to the Partnership.
Nat Wakely, director, pensions benefit review at the John Lewis Partnership, said: “The John Lewis Partnership pension is a defining element of our business and this decision will ensure that it remains so in a way that is fair and affordable.
“The council’s unanimous vote in favour of the final proposal was the culmination of a very thorough process, involving every area of the Partnership and concluding in a decision that we took together in an open and democratic way.”