Employees at John Lewis and Waitrose will share £210.8 million in profit.
Each of the John Lewis Partnership’s 84,000 employees will receive the same percentage of annual pay as a cash bonus. This represent 17% of each employee’s annual salary, equivalent to nearly nine weeks’ pay.
According to the retailer’s results for the year ended 26 January 2012, the accounting charge for pensions included within operating profit was £138.1 million, an increase of £14.1 million or 11.4% on the prior year reflecting the change in the financial assumptions and growth in scheme membership.
The total accounting pension deficit at 26 January 2013 was £822.1 million, an increase of £184 million (28.8%). Net of deferred tax the deficit was £652.4m. The accounting valuation of pension fund liabilities increased by £621 million (19.6%) to £3,796 million, while pension fund assets increased by £437 million (17.2%) to £2,973.9 million, including a £125 million one-off cash contribution made by the organisation in January 2013.
On the actuarial funding basis used in the last valuation in 2010, John Lewis Partnership estimates its defined benefit final salary pension schemes would have ended the year with a surplus of approximately £280 million. However, given that gilt yields are indicating lower returns in the future, it anticipates the schemes’ actuarial funding position will weaken. The next formal valuation of the schemes will be as at 31 March 2013.
Charlie Mayfield, chairman of the John Lewis Partnership, said: “This has been a good year for the partnership with growth in sales and profit above our expectations.
“We see this as a time of significant opportunity in a changing market.”