THE John Lewis Partnership is considering raising the age at which staff can draw a full pension, as part of a plan to save more than £10 million a year.
A cost-cutting review by an internal committee of John Lewis staff is proposing to raise the normal pension age from 60 to 65, or 62 for department managers.
The move would follow similar changes by rival retailers, including Woolworths and Arcadia, the owner of Top Shop and Dorothy Perkins, and more drastic measures elsewhere as companies struggle to finance increasing pension costs.
Also under review by John Lewis are benefits for retired staff, including a £20 Christmas bonus and a free copy of its weekly Gazette in-house magazine. The business hopes to cut the cost of supporting retired staff by more than £400,000.
John Lewis, which owns the eponymous department store and the Waitrose supermarket chain, is structured as a partnership, in which decisions are made by a lengthy democratic process and staff receive a share of annual profits.
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The retailer offers staff one of the most generous retirement packages in the market, including a non-contributory final-salary pension. In 2002, it reviewed pension arrangements and decided to keep its final-salary scheme, but to change it so that from February 2003 staff could not earn a non-contributory pension for the first five years’ employment.
Two special committees are undertaking a further review of pension arrangements. Andy Street, director of personnel, who is leading a committee on pension age, said he felt that the new pension age should be brought in for staff below 50.
He said: “The change in the normal pension age will result in reduced pensions for partners who retire at 60, but no reduction for those who intend to retire at 65 or for managers who are going to work to 62.”
The proposals on retirement benefits have caused uproar in the Gazette, in which staff and former staff can raise issues.