The retailer is expected to announce an end to its defined benefits pension scheme, which is understood to have a shortfall of Pouns 29m, in the coming months as part of a broad financial review.
Any changes in its pension schemes will not affect existing employees, the company said. Plans to open a new scheme are underway but no decisions on what form this will take have been made.
Whitbread, ICI, Lloyds TSB, Sainsbury’s and BT have all axed their final salary schemes in favour of less costly schemes due to a volatile stock market, earlier retirement and longevity.
A new accounting standard, FRS 17, has also added to the burden for companies. FRS 17, effective in parts from December until 2003, requires companies to show on their balance sheets the market value of their pension schemes’ assets and liabilities.
But, it is the fall in equities markets that is primarily driving the pensions shake-up. Boots recently moved its pension scheme assets out of equities into bonds.
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