M&S latest to shelve final salary pension

Retail chain Marks & Spencer has closed its final
salary pension scheme, with staff recruited after 1 April unable to join the
non-contributory pension.

Unions have slammed the move – the latest in a long line of
scheme closures by firms, including Iceland and Ernst & Young.

However, there will be no change to the pension scheme of
current M&S staff – only new starters will be affected.

After a year’s service, new staff will join a defined
contribution arrangement which will be contracted in to the State Earning
Related Pension Scheme.

M&S announced the move following a 12-month review.
Under the new scheme employees will need to contribute between 3 and 6 per cent
of earnings, with M&S adding between 6 and 12 per cent of the member’s
contribution.

During the qualifying period staff will be covered for
life assurance of twice their annual salary and will also be encouraged to take
out a stakeholder pension.

John Peachey, head of group pensions, said the plan would
be competitive.

“The new flexible scheme is more appropriate for today’s
business environment and will allow employees, with the support of the company,
to take ownership of their final pension by deciding how big a commitment they
are prepared to make," he said.

"We will encourage all new employees to become part
of the plan and have assured current employees that their own scheme will
remain unaffected."

By Ross Wigham

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