WBA recently moved Boots pension scheme to L&G in a £4.8 billion deal
The Pharmacists’ Defence Association (PDA) is probing major concerns arising from Boots' communications to pharmacists regarding the company's recently announced pension arrangements.
In November, Walgreens Boots Alliance (WBA), the parent company of Boots, transferred the Boots employees' pension scheme to the financial service provider Legal and General (L&G) in a £4.8 billion deal.
Boots notified staff that terms allowing an unreduced pension from age 60 have ceased immediately, following its agreement with L&G.
The PDA highlighted member concerns regarding Boots management's announcement that an unreduced pension from the age of 60 is a discretionary benefit and not guaranteed under the Boots Pension Scheme (BPS), contrary to some members' assumptions.
On December 7, the PDA communicated with affected members—those possessing pension benefits in the BPS, a final salary scheme closed to new entrants in 2010—explaining that the winding up of closed final salary schemes and securing benefits through an insurance policy is a standard procedure.
"Discretionary benefits are not protected unless explicitly included in the rules during the commencement of the winding-up process and buy-in," the PDA wrote.
PDA Union National Officer Paul Moloney said that his team has been evaluating various pieces of information, with a particular focus on the Trust Deed and Rules, which are deemed the definitive documents.
Moloney emphasised that these documents do describe the normal retirement age as 65. “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,” he added.
"No mention is made that this is solely at the discretion of the trustees, and importantly, there is no indication that individuals should not rely on this arrangement still being in place upon their retirement,” he added.
Moloney said, "If benefit statements had included words to this effect, we would reluctantly have concluded that nothing could be done to safeguard the unreduced pension at 60. However, based on our examination, such language is absent."
"Our considered view, emphasising the information available to date, suggests a potential matter for resolution by the Pensions Ombudsman.”
However, the PDA advised members against taking additional steps, such as making a claim, pending further investigations by the PDA to determine whether the evidence supports the company's position.
"If not available, we will guide members on the steps to utilise the disputes procedure before filing complaints with the Ombudsman,” Moloney said in the letter.
The PDA plans to provide members with an update by the end of next week.
Boots and the Trustees of the Boots Pension Scheme announced an insurance transaction for increased certainty and security, according to the company.
“In the customary review, various pension options previously at the Trustee's discretion were assessed. Insured options, like death benefits for eligible dependants, were retained, while discretionary choices such as enhanced early retirement were discontinued,” Boots added.
In November, Boots closed three additional stores as part of its ongoing initiative to shutter 300 stores across the UK in the next 12 months.
