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PDA investigating concerns around Boots pharmacists’ pension entitlements

Pharmacy News

PDA investigating concerns around Boots pharmacists’ pension entitlements

The Pharmacists’ Defence Association is investigating “considerable concern” prompted by Boots’ communications to pharmacists about their new pension arrangements.

Following the company’s recent announcement that it is offloading its £4.8bn pension liabilities to Legal & General, the PDA said some members were concerned by an announcement from Boots management specifying that an unreduced pension from the age of 60 was a discretionary benefit and not guaranteed under the Boots Pension Scheme (BPS), as some had thought.

The company has informed staff that the terms offering an unreduced pension from the age of 60 have therefore ended with immediate effect following its reaching a deal with Legal & General.

Yesterday (December 7), the PDA wrote to affected members – those who have pension benefits in the BPS, a final salary scheme that closed to new entrants in 2010 – explaining that it is “not unusual for closed final salary schemes to be wound up and benefits secured through an insurance policy”.

It added: “Any benefits provided at the discretion of the trustees are not protected unless they are written into the rules at the point at which the winding up process and buy in start”. 

PDA Union national officer Paul Moloney said his team has been “assessing several pieces of information,” in particular the Trust Deed and Rules which “will always be considered the definitive document” and which do “describe normal retirement age as 65,” said Mr Moloney.

But he added: “However, we have also seen individual benefit statements from those members kind enough to send them to us. There is no doubt these communicate that a full pension is payable at 60.

“There is no mention of this only being at the discretion of the trustees and, crucially, no mention that individuals should not rely on this still being in place when they retire.

“Had benefit statements included words to this effect then we would reluctantly have concluded that nothing could be done to protect the unreduced pension at 60. But as far as we have seen they do not.

“Our considered view based, and this must be stressed, on the information we have seen to date, is that there is potentially an issue for the Pensions Ombudsman to resolve.” 

The PDA urged members not to take any further steps such as making a claim pending the PDA’s own further investigations to determine whether evidence suggests that the company’s position is correct.

“In the absence of that, we will advise members on the steps to take to use the disputes procedure prior to lodging complaints with the Ombudsman.”

Mr Moloney said the PDA will issue an update to members “towards the end of next week”.

When approached by P3pharmacy, Boots responded with a statement that included the following: "Boots together with the Trustees of the Boots defined benefit Pension Scheme was pleased to announce on 24 November an insurance transaction that delivered greater certainty and security for all members of the Pension Scheme. 

"As is customary in these transactions, consideration was also given to a number of pension options that were previously available to Pension Scheme members at the discretion of the Trustee, but in relation to which members had no legal entitlement.

"While some of these options were insured (for example, the provision of death benefits to eligible surviving dependants typically spouses, partners and children) certain discretionary options (for example, enhanced early retirement) were discontinued. 

"We would like to emphasise 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.

"Further, 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."

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