The Pharmacists’ Defence Association has accused Boots of changing its rules regarding its pension benefits on the day its pension scheme was bought out by Legal & General. 

The PDA Union, which is challenging the company on its pension obligations on behalf of several hundred PDAU members (thousands more current and ex-Boots employees are thought to be affected), made the revelation yesterday (July 15) after the company shared previously unseen documents. 

While Boots Pension Scheme (BPS) trustees, along with the company, claim that the previous offer of a full pension from 60 years of age was a “discretionary benefit”, the PDAU is arguing that this was an explicitly stated right under the scheme’s rules.  

The latest documents to emerge, which have been seen by P3pharmacy, suggest that until November 24 last year, the BPS rules stated that an ex-employee, or ‘deferred member’, could “elect to receive his pension before his Normal Pension Age” and that a ‘pre-1994 deferred member’ aged 60 or more could opt “to receive his entire pension immediately”.

The documents show that on November 24 2023 – the day the £4.8bn L&G buyout was announced – this rule was scrapped and replaced with new provisions. 

The PDAU said this “significant information” had not previously been disclosed, which it said was “potentially in breach of Pensions legislation”. 

PDAU officer Paul Moloney described this as an “unexpected discovery”, going on to say: “It begs the question why did the trustees, with the company’s agreement, need to change the rules, and in secret, if members did not have the right to an unreduced pension.”

“Our members have planned their retirement based upon what they understood the rule to be, an understanding that has now been proven to be correct.” 

Both stages of the company’s internal dispute resolution process have now been exhausted, and the PDAU has said it may raise the case with the Pensions Ombudsman and possibly the High Court.

Prior to this, the trade union has requested that Boots executives and scheme trustees meet with affected PDAU members to discuss ways to resolve the dispute “without the need for lengthy legal challenges”. 

The union is also asking the pensions regulator to investigate whether the “non-disclosure of the rule change” was lawful, and has written to L&C chief executive Antonio SImoes asking him to put the pension scheme buyout on hold “until the position has been established through the Pension Ombudsman or the courts”. 

A Boots spokesperson told P3pharmacy: “The buy-in transaction with Legal & General last November secured the Boots Scheme members’ benefits with a leading insurer. To achieve this, Boots brought forward and made additional commitments worth almost £700m to deliver the ‘Gold Standard’ level of security and protection for members’ benefits. 

“As required by the Scheme rules, all existing benefit entitlements continue to be provided and changes to discretionary practice were actively communicated to the relevant members.

“The company and the trustees firmly believe this transaction was in the best interest of the membership.”