Unions yesterday reacted angrily to news that department store chain Debenhams is to close its final salary pension scheme to both new and existing members.
The controversial decision followed 18 months of negotiations with the scheme's trustees, and just three months after the firm's £1.67 billion stock market flotation.
Chief executive Rob Templeman wrote to members admitting that the "uncertain climate of low investment returns and volatility" had forced the company to decide the "status quo was no longer a viable option". But a spokesman for shopworkers' union Usdaw said it believed it was "totally unnecessary" to close the final salary pension scheme and urged Debenhams to change its plans.
"We will now examine the fund as part of an investigation into what has sparked this and we will try to persuade the company to change its mind," he said.
"Retail is a relatively low paid job and one of the perks is a final salary pension scheme which allows some dignity in retirement.
"Closing it appears to be a solution that is totally unnecessary. Our members have paid into this scheme in good faith over a period of time and would expect a final salary pension arrangement unless there was something absolutely catastrophic."
The £500 million, fully funded scheme will close to new entrants on November 1 while existing members will stop accruing benefits on October 31.
Existing members will keep the benefits which they have accrued to date but all future saving would have to be made within a less generous stake-holder scheme.
For new members, Debenhams will match staff contributions up to five per cent of their salary with a higher percentage for existing members.
Debenhams returned to the market in May after an absence of more than two years.
Around one in ten smaller companies are so far thought to have made a similar move.
Meanwhile, risk management and insurance broking group Jardine Lloyd Thompson also said it was proposing to close its final salary scheme.