The clothing retailer Jacques Vert, which owns brands including Planet and Windsmoor, became the latest company to slash the benefits for members of its final-salary pension scheme yesterday, claiming it was unable to afford the original packages it had promised staff.
Some 1,400 former employees of William Baird - which was acquired by Jacques Vert in 2002 - will be affected by the changes, which will see the company scrap its promise to increase staff pensions by 5 per cent every year once they retire.
Only nine of those affected still work for Jacques Vert. The remainder are so-called "deferred pensioners", who have not yet reached retirement age and now work elsewhere. The scheme has some 1,100 members who are already drawing their pension. Jacques Vert said they would not be affected by the changes.
The £93m William Baird scheme currently has a deficit of £35.2m. But in a statement yesterday, Jacques Vert said it had been advised that most of this could be cleared by eliminating the promise to increase pensions by 5 per cent a year.
As part of the restructure, the old scheme will be wound up and all members transferred into a new plan. The group said it has been given clearance by the Pensions Regulator to push ahead with the changes.
The company has agreed to make a one-off contribution of £5m into the scheme over the next two years, and will then pay £170,000 a year towards the ongoing costs. The new scheme will also be given a so-called "phantom option" over 10 million shares in the company, exerciseable at a price of 14.75p between July 2009 and July 2015.
Shares in the company, which is quoted on AIM, closed up 1.5p at 16.25p yesterday, giving the company a market value of about £30m.Reuse content