Department store to axe final salary scheme
World famous department store Harrods has told its workforce that it will close its final salary pension scheme on April 6 and replace it with a money purchase scheme instead.

In a letter to the 1,500 employees affected, Harrods said that although it would pay in£90 million over the next 10 years plus any further contributions to make good any deficit, the current shortfall of£111 million had proved too much for the company.

Continuing with the scheme represents an 'unacceptable future risk', Harrods told staff in the letter.

The Transport & General Workers Union (T&G), which represents the warehouse and distribution staff across the store's London operations, said news that the maximum employer contribution would be almost halved was an additional blow.

'This has come as a big shock to our members and they are extremely concerned for their future,' said T&G regional industrial organiser Madeleine Richards.

Harrods has 6,541 people in its pension scheme as current members, pensioners and deferred pensioners. There are 1,500 current members who will be affected directly by this move.