UK department store chain Debenhams has unveiled plans to close its final salary pension scheme to new and existing members after the scheme became too expensive.
The company plans to consult with staff, unions and the pension schemes trustees over the next few months, and if successful it would be only the third major company in the UK to close such a scheme, joining Rentokil Initial and Harrods.
The fully-funded GBP500 million scheme is set to close to new entrants on November 1, 2006 and existing members benefits will be stopped on October 31, This is Money has reported.
The decision follows the company’s GBP1.67 billion flotation on the stock market three months ago.
The news comes as a new study, by actuarial consultants Lane Clark & Peacock, reveals that the UK’s top 100 companies have a group pension scheme deficit of GBP36 billion, predicting that the majority companies will shut their final salary pension schemes within six years.