is close to finalising plans to radically overhaul its partners’ treasured pension scheme.
It is understood that the magic circle firm’s partnership council will be considering the lastest plans, which have been broadly welcomed by the partners, this week.
According to well-placed sources, retired partners will receive a maximum of £17,000 per point per year over a period of at least ten years, after which payments will be reduced. Retired partners will be on anything between zero and nine points. This means that a partner will receive a maximum of £153,000 per year.
Freshfields currently operates an unfunded pension scheme, meaning contributions are made into the fund out of annual profit. Retired partners are entitled to receive a share in the profit in any given year. It is understood that a partner retiring aged 55 or over would get one-fifth of the amount a working partner receives that year. This is, however, subject to a 10 per cent cap on total annual profit.
One Freshfields insider said that, in the future, when the firm has significantly more retired partners, it will reach the cap more quickly. “The whole idea is to rebalance the distribution to avoid the situation where the current generation of retired partners do really well, while the next generation gets nothing,” said the source.