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John Lewis Partnership announces plan to fully fund pension plan over 10 years

A John Lewis Partnership store in the Bluewater shopping center near Greenhithe, England

The deficit of John Lewis Partnership PLC's U.K. defined benefit fund fell 43% over the three years ended March 31, to £479 million ($689 million), and a 10-year funding plan to eliminate the deficit has been agreed to by the sponsor and pension fund trustee.

In an announcement of its latest triennial valuation, John Lewis said the reduction in the deficit is due to a number of factors including payment of deficit contributions by the sponsor, a change in allowance for discretionary increases in benefits and excess investment returns. These factors were partly offset by a reduction in the real discount rate, added the announcement.

The firm has agreed a 10-year plan to eliminate the deficit. Cash contributions of £303 million will be paid over the period, starting with £183 million before the end of March 2017. The remaining £120 million will be paid over the following nine years, ending March 31, 2026.

The remainder of the deficit is expected to be met by investment returns on the assets of the London-based pension fund, which had £4.8 billion in assets as of July 30, according to the retailer's latest interim report.

The firm moved to a hybrid plan in April 2016.

Spokesmen could not be reached for comment by press time.