Boots, a pharmacy chain in the UK gets taken over by a US firm, then workers pensions are slashed.

[TheBigotBasher]

Boots is a large, mainly pharmacy chain in the United Kingdom.

It employs 75,000 people in stores throughout the United Kingdom. A great proportion of those make very little above minimum wage. Of the 75,000 employed, 15,000 are in the Final Salary Pensions Scheme.

As a result of a relatively static stock market from 2000 and various tax changes many Pension funds in the UK fell in to the red. In response, Companies closed these schemes to new employees. The pension you would get would depend heavily on the value of the stock exchange. Boots closed theirs in 2000, 20% of the workforce as it now stands remain in that final salary scheme. They were loyal employees to the Company.

Alliance Boots was bought by private equity firm Kohlberg Kravis Roberts and Stefano Pessina, now executive chairman, for £11bn in June 2007, in the biggest ever leveraged buyout in Europe.

The first announcement of their new boss was to announce the end of the final salary scheme and complete transfer of all those long term staff to investment fund pensions. Many will have no ability to develop a decent pension in the few years they have available before retirement.

This they argue is to provide better motivate staff.

Their new boss is a former Halifax Bank of Scotland fat cat Andy Hornby. The 43-year-old lost his job after the bank's disastrous takeover by Lloyds but had already built up a £240,000-a-year pension.

The pension fund is £188 million in surplus. Despite the recession, trading profit climbed 11.6% to £953m, as at May 2009 but a large chunk of that was absorbed by finance costs of £705m, on sales of £20 billion.

What a great thank you to staff for years of loyalty.

[Rosa Luxemburg]

1. I like Boots

[LeftishBrit]

2. Behold the wonders of Thatcherism, still poisoning society after 18 years

[malaise]

4. Yes indeed

She's clueless given her state of dementia but her mad love for Hayek and Friedman have created chaos for way too many people.

[BlueJazz]

3. You might want to be careful Mr. Andy Hornby. Chances are one of the.....

...people you are destorying might feel they have nothing to lose be ending your ..ahhh..."Term of Employment"

[virgogal]

5. I love Boots,the blue and white sign,and their presence everywhere.

I did not know they had been sold.

[TheBigotBasher]

7. Back in 2007

to a Gordon Gekko Private Finance company.

[virgogal]

10. Sad. eom

[HipChick]

6. Boots products have been available in Target and CVS for the longest..

so this is interesting..they have the No1 anti-wrinkle cream

[dixiegrrrrl]

8. When the world ends, there will be only cockroaches and

KKR and the Carlyle Group, still fighting to take each other over.
2 of the biggest vulture groups on the planet.

[TheBigotBasher]

9. Vulture capital.

[bik0]

11. Alliance Boots treads familiar path with plan to close final-salary pension scheme

Alliance Boots has begun to consult employees over plans to close its generous final-salary pension scheme to existing members.

The company said that about 15,000 staff — 20 per cent of its British workforce — would be affected. It employs about 75,000 people in the UK and a further 40,000 overseas.

The high street health and beauty chain is following Wm Morrison, the supermarket group, the British divisions of Fujitsu and IBM, the technology companies, and Barclays Bank, all of which have moved in recent months to close their final-salary pension schemes to future accruals.

Although maintaining a final-salary scheme, which pays out based on an employee’s earnings at retirement, is much more expensive for companies, Alliance Boots maintained yesterday that it was not proposing the measure for cost reasons. It said that the decision would help to make Alliance Boots more sustainable over the longer term. It also said that it would pre-empt the introduction of compulsory workplace pensions in stages from 2012.

Stefano Pessina, the executive chairman of Alliance Boots, said: “Having very carefully considered all options, the proposed pension changes for UK employees is the right step to take. This will help protect the business from the effect of pension funding volatility and ensure the long-term sustainability of the group’s UK retirement savings schemes.”

Companies have been shutting their final-salary schemes over the past ten years as they come under pressure from the longer lives of their workforce after retirement and as their investments suffer amid turbulent share and bond markets.

Alliance Boots, which was taken over for £12.3 billion by Kohlberg Kravis Roberts (KKR) in 2007, operates two final-salary schemes. Its Boots scheme, whose move into bond investments was pioneered by John Ralfe, its former finance director, was closed to new staff in 2000. The scheme operated by Alliance UniChem, which merged with the chain in a £7.3 billion deal a year before the KKR takeover, shut its scheme to new joiners in 2002.

According to its most recent report, the Alliance Boots pension schemes were operating a surplus of £188 million last March. A valuation of the scheme, which has since transferred substantial investments into property and equities, is due this year and is widely expected to show the scheme having fallen into deficit. Under its proposals, outlined in letters sent to staff yesterday, all employees would be enrolled into a new group-wide defined-contribution scheme, which places the risks of market investments firmly with the employee.

Alliance Boots contributes 5 per cent of a worker’s salary to its existing defined contribution schemes, with staff contributing a similar amount. Alliance Boots said that about 5,500 staff paid into defined-contribution schemes that were set up when the restrictions on existing final-salary schemes were put in place. It said that about 70 per cent of its UK staff were not members of any pension scheme.

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article7009112.ece

[TheBigotBasher]

12. Most employers closed their scheme to new employees.

This closes it to those staff who have remained loyal to the Company since 2000. That is a disgrace, especially when their new owners just spent £1 billion on buying up a small pet chain.

[Lydia Leftcoast]

13. KKR took over Fred Meyer (a Target-like chain in the Pacific Northwest) and

immediately started treating the employees like crap.

People who had been working their forever suddenly found themselves with highly irregular hours, with their eligibility for benefits varying from week to week.

Their union actually went on strike over it, but sad to say, most working class people walked right through the picket line (the talk radio guys said things like, "Their union is greedy"), and it was the hippie leftists who not only honored the picket line but brought the picketers food and drinks.

[hfojvt]

14. the workers cannot say they were not warned

"One of these days these boots are gonna walk all over you." :hide:

[glinda]

15. US medical companies are trying to take over parts of the Canadian heath system also...

Behold the true Drug Cartel.

[Itchinjim]

16. KK & R put me out of work in 1987 when they bought Beatrice Foods.

I lost my pension too. The fuckers haven't changed much.