Marks and Spencer and John Lewis Pension Schemes Case Study

Marks and Spencer and John Lewis Pension Schemes - Case Study Example Until now workers of M&S did not have to make any contribution towards their own pension from their salary and they were entitled to a small part of their final salary as retirement income. Thus compared with John Lewis pension scheme in which workers do not have to make contributions towards the final salary scheme and retirement income from their existing salaries, Marks & Spencer pension scheme has changed so that workers will have to make a final contribution towards their final salary scheme or they may receive lowered benefits later. There are conflicts of interest between employees and trustees in both John Lewis and Marks and Spencer. However John Lewis is a partnership business which means it is largely controlled by employees. The employee trusts adequately maintain the benefits of employee ownership structures and in case of John Lewis there is breakdown of the strict dichotomy between employees and trustees with employees having direct ownership to an extent. However in case of Marks& Spencer, the trustees are responsible for funding and the pension scheme and the employee trustee distinction is quite obvious with both potential and real conflicts within Marks and Spencer. The John Lewis Partnership had still... 3. Defined Benefit/Defined Contribution. Which type of provision suits each organization and why The John Lewis Partnership had still recently reduced the benefits of its pension scheme to cut the costs of its operations and maintenance. However in the last year, with profits up to 27% increase, 85m has been marked out for pension based funds which would be nearly 10% of the company's budget (John Lewis, 2007). The pension costs being very high for the company when compared with other companies, the cutting down of pension costs provide reasonable savings for the company. Recent changes in the M&S salary schemes mean that pension contribution will have to accrue benefits at a slower rate or there has to be limits on the rate at which pensionable salaries rise. Contribution and benefits are tied in case of M&S salary and pension scheme as members contribute to their own salary and benefits by using some for later retirement income. In case of John Lewis benefit schemes, employee contributions are not direct and usually employees are subject to these schemes for their benefit on r etirement. 4. John Lewis Partnership is not a quoted company. How does that affect its pension policy (if at all) Is it a "better or worse" situation in this regard than Marks and Spencer John Lewis being not a quoted company but rather run by the concept of partnership showing that employees claim direct ownership to the business (John Lewis, 2007). Recently John Lewis has also launched a unique share incentive plan and it remains as primarily an employee owned company and this affects its pension policy that focuses on a large share of costs on the