Pensions - Articles - Broadstone on closure of M&S DB scheme to future accruals

 “It comes as a slight surprise to discover that the shop assistants who sell pants to the generation that has generously reaped the rewards of final salary pension schemes were still enjoying such benefits themselves. Alas, no longer. They, like the rest of the UK’s private sector workers, are now consigned to a future in which they’ll be spending their retirement knitting their own underwear.

 “Marks and Spencer’s decision to close their DB scheme to future accrual, even though their last actuarial valuation showed a healthy surplus is a great disappointment to those who believe that Defined Benefit Pension benefits in the private sector should be maintained.

 “However, the pressure of depressed gilt yields on rising liability values means that it is understandable that Marks and Spencer wants to lock in the gains they’ve made in recent years, going from c£100m deficit to c£200m surplus and perhaps avoid the pressures on their business experienced by retail competitors such as BHS.

 “Current Active Members should be heartened that they will still have a precious benefit and ensure they properly understand the pension they have and not become prey to fraudsters and scammers looking to encourage them to transfer their benefits elsewhere. They should take proper financial advice where necessary and support from the employer and trustees when available.”