The John Lewis Partnership, the UK department store, has released its unaudited interim results from the beginning of the year to 29 July 2023, which shows a technical provisions surplus of £320m for its John Lewis Partnership Trust for Pensions scheme as of its latest triennial valuation at 31 March 2022, up from a deficit of £58m at its March 2019 valuation.
“Key terms of the three-yearly pension valuation have been agreed, resulting in a surplus. We expect to complete the valuation in the second half with £10.0m annual deficit repair payments no longer required,” the company announced.
As per its accounting valuation at January 2023, the pension fund had an accounting pension deficit before deferred tax of £101.9m (£100.2m after deferred tax). At the half year, this has increased to £155.1m (£140.1m after deferred tax).
John Lewis made clear that the accounting valuation has no implication for the Partnership in terms of cash contributions that might need to be made to the scheme, which has total assets close to £5bn.
The scheme includes a defined benefit (DB) section, providing pensions and death benefits to members. All contributions to the DB section of the scheme are funded by the Partnership. The DB section of the scheme closed to new members and future accrual on 1 April 2020 and all active members of the scheme moved to become deferred members.
The scheme also includes a defined contribution (DC) section. Contributions to the DC section of the scheme are made by both Partners and the Partnership.
Given the material improvement in funding positions of DB pension schemes, new regulations now appear “superfluous”, according to the latest analysis of FTSE 350 DB schemes by consultancy firm Barnett Waddingham.
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