The John Lewis Partnership has extended its defined benefit (DB) pension scheme to an additional 12,000 employees, raising the total deficit by £8million, according to its interim results.
From 1 October, the retailer will reduce the waiting period for membership to its DB final salary scheme from five years to three years. It will also introduce a defined contribution scheme for staff before they become eligible to join the DB scheme. This will have matching contributions of 6%.
The changes were agreed with employees earlier this year.
The retailer’s interim results also announced its first fall in profits for six years. As a result, its total pension costs now stand at £50million, an increase of 19% on last year. Of the additional charge to the DB scheme, Waitrose were responsible for £5m, John Lewis Partnership for £2.5m, and the remaining £0.5m was attributable to Corporate.
A spokesman at John Lewis Partnership said: “We are committed to retaining the defined benefit scheme because we are a different type of business. The decision is made for the benefit of our partners, not shareholders. There are powerful links between our power structure and the service our customers receive at John Lewis and Waitrose and extending the defined benefit scheme will add to that, as well as improving staff recruitment and retention.”