House of Fraser DB Scheme Closure In Line With Most Retailers
11 June 2012 (PLANSPONSOREurope.com) - House of Fraser’s closure of its defined benefit scheme is in line with the activity of most UK retailers and business, a spokesperson for the UK retailer has told PLANSPONSOR Europe.
The Telegraph reports House of Fraser, which last year refinanced its bank debts with the issue of a £250m bond, has told employees that it is closing its final salary scheme.
The move follows a near-trebling in the size of the group’s pension deficit, from £31.7m at the end of January 2011 to £85m at the end of January 2012.
The paper adds it is understood the deficit has been cut to £79m due to company contributions and it is believed that of the retailer’s staff of 7,000, 350 of the retailer’s 7,000 staff are affected by the attempt to stem the deficit.
Historically, House of Fraser historically ran a number of schemes. The closure affects the main House of Fraser pension plan, as well as the James Beattie pension scheme, – which it inherited on acquisition of the Beatties store chain in 2005 – , and the Jenners Princes Street Edinburgh plan.
The retailer had been involved in a process of consultation with scheme members and the respective fund trustees.
The company closed the scheme to new members a decade ago and has now closed the schemes to future accrual.
A spokesperson told PLANSPONSOR Europe: “The reports are accurate. It is only relevant to 5% of the total staff there. It is [in] line with [what] most retailers and businesses have been doing over the last few years, of moving away from Defined defined pension schemes.
“All members become eligible to join the House of Fraser Group Stakeholder scheme.”