John Lewis Partnership, London, reported a 57.6% increase in its pension deficit for its financial year ended Jan. 30.
On an accounting basis, the deficit grew to £572 million ($784 million) over the year, according to the retailer's latest annual report published Thursday.
The increase was mainly attributed to lower interest rates and the U.K. government's decision to replace the retail price index with the consumer price index for liability calculations starting in 2030. The change was put in place "with only a limited transition, which together mean we are likely to have to put more money aside to cover future pension payments," the report said.
Cash contributions by John Lewis, however, will not change. The last triennial valuation, as of March 31, 2019, showed a deficit of £58 million, leading to the sponsoring employer making annual cash contributions of £10 million until 2026 to plug the deficit.
The retailer froze its £6.8 billion pension fund in April 2020, which saved about £55 million in costs in the latest financial year, the report added.