Boots parent company Walgreens Boots Alliance (WBA) last month announced that it had offloaded Boots employees’ pension scheme to financial service provider Legal and General (L&G) in a £4.8 billion deal.
Last week (December 7), the Pharmacists’ Defence Association (PDA) announced that the deal could lead to a pension reduction for Boot’s employees wishing to withdraw their pension before they turn 65.
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The PDA announced that it has “been investigating” claims from the multiple that “an unreduced pension from age 60…has ended with the buy-in”.
An “unreduced pension”, which the PDA said was previously available to Boots employees under the scheme from the age of 60, is not reduced in the event of an early retirement.
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The union said that Boots “is now claiming” that “the ability to take an unreduced pension from age 60” was a “discretionary” benefit.
In an email to union members employed at Boots, it said that now that the pension scheme has undergone the buy-in, the benefit “has not been secured through a change in the rules and has therefore ceased with immediate effect”.
However, Boots stressed that scheme “members will continue to receive their full pension without any reduction from the pension scheme’s normal retirement age”. Read the multiple's full response below.
“No mention” of benefit being discretionary
The PDA said that it has been “assessing several pieces of information to test” the accuracy of Boots’ description “of an unreduced pension from age 60 as discretionary”.
It said that its members have “individual benefit statements” that “no doubt…communicate that a full pension is payable at 60”.
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“There is no mention of this only being at the discretion of the trustees” in the statements, it added.
The PDA said that as far as it had seen, statements include “no mention that individuals should not rely on this still being in place when they retire”.
It stressed that the buy-in relates to the “final salary scheme” that closed in 2010 to new entrants and future accrual and does not apply to members “in other Boots pension schemes or in no pension scheme”.
“Potentially an issue for the pensions ombudsman”
The union said that from the information it has seen “to date”, there “is potentially an issue for the pensions ombudsman to resolve”.
It highlighted that “the first step, however, is to use the internal disputes procedure” as this is “a requirement of the ombudsman before [it] can take up cases”.
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But the union stressed that members employed by Boots “should not make any claim yet”. “It is very important that members wait for our next email before taking any action…within Boots or [with] the ombudsman,” it added.
It said that it still has “some further investigations to carry out and other documents to obtain and check” before it advises its members on what to do “towards the end of next week”.
“Members will continue to receive their full pension”
Responding to the PDA’s claims, a Boots spokesperson told C+D that the deal has “delivered greater certainty and security for all members of the pension scheme”.
They said that “members’ pensions are now better protected” by an “insurance policy”.
They added that “consideration was also given to a number of pension options that were previously available to pension scheme members” and admitted that “certain discretionary options” like “enhanced” early retirement “were discontinued”.
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The spokesperson stressed that “members will continue to receive their full pension without any reduction from the pension scheme’s normal retirement age, which is 65 for most members”.
They said that “it is still possible for members to apply to take early retirement, just not on the legacy enhanced and strictly discretionary basis”.
“We have provided a dedicated helpline for members of the pension scheme who have questions about these changes,” they added.
Meanwhile, rumours are circulating that WBA is planning to put Boots up for sale again, with The Times reporting that “City sources” believed it could restart the “sale process…within the next six months”.
