Freshfields Bruckhaus Deringer has finalised plans to radically overhaul its partners' treasured pension scheme, with some older partners accepting that they may receive as little as 40 per cent of their entitlement.
Co-senior partner Konstantin Mettenheimer told The Lawyer that 90 per cent of partners agreed to the changes in an effort to make the system fairer across the board.
"It's difficult to say if there will be a difference in the amount partners receive," he said. "If the future is brilliant, partners may gain something, but if things don't go as well as we'd hope, some partners may take a hit."
Under the pension plan, retired partners will receive a maximum of £17,000 per point per year over a period of at least 10 years, after which payments will be reduced. Retired partners will be on anything between zero and nine points, which means a partner will receive a maximum of £153,000 per year.
Freshfields previously operated an unfunded pension scheme, whereby contributions were made into the fund out of annual profit, subject to a 10 per cent cap on annual profit.
One Freshfields insider said: "The idea is to make the scheme sustainable to avoid the situation where older partners do quite well, while the next generation's pension is diluted. In the interest of the firm, older partners have accepted getting less than what they thought they would get."