UK – Department store Harrods could be facing “damaging” strike action following its failure to undertake proper consultations on its decision to shut its final salary pension scheme, the Amicus union has warned.

Amicus – representing 100 members at Harrods – has accused the store of replacing the existing final salary scheme with an “inferior money purchase scheme”.

In February, Harrods announced its decision to shut its final salary scheme to new and existing members from April, and open up a defined contribution scheme. The scheme deficit stands at £95m.

Longer life expectancy, lower interest rates, higher taxes and low investment returns were cited as some of the reasons for the closure.

Harrods stated it has been involved in consultations and remains “fully committed to the individual one on one consultation process so that our employees can be best advised on their future pension planning needs”.

According to a management statement on Saturday, Amicus’s proposals were to be reviewed on the weekend. However, a Harrods spokesperson today declined to comment on whether any consensus between the parties had been reached.

However, Amicus claims the scheme has refused to negotiate.

“Amicus has put forward a number of alternative proposals which would address the deficit and maintain a decent pension for staff, but to date Harrods has refused to negotiate with the union and plans to impose the new scheme in April,” said a statement released today.

“Amicus has a zero tolerance approach to companies which refuse to negotiate on pensions.”

In other news, furniture retailer MFI is suing city law firm Clifford Chance for its role in MFI’s £200m pension deficit. The claim could run as high as £10m.

According to reports, MFI discovered it had underestimated its deficit by £50m in 2004. It is subsequently blaming the poor advice of its scheme actuaries and advisers during the 1990s for the error.