Clifford Chance makes post-Bloxham pensions overhaul” />Clifford Chance has voted through amendments to its pension package so all references to age are removed.
Until now partners retiring at 55 have received 25 per cent of their final profit share every year until they reach 60. Although the annuity package is being phased out, with those who made partner after 2005 not entitled to any payments, the firm felt these terms left it open to possible age discrimination claims.
As revealed in The Lawyer (19 November 2007), the firm waited for the outcome of the age discrimination case brought against Freshfields Bruckhaus Deringer by former insolvency partner Peter Bloxham before pressing ahead with the changes.
Clifford Chance executive partner and general counsel Chris Perrin, who led the team working on the annuity overhaul, said: “We decided that some of the arrangements could be challenged under age discrimination legislation. While the annuity is being phased out it will take about 30 years. If it had been five years we probably wouldn’t have done anything because it is not likely that partners would have challenged it on discrimination grounds.
“We thought it was sensible to amend the rules to comply with legislation,” he added.
The previous package was designed to encourage early retirement with those retiring at 55 getting five years of payments while those retiring at 58 would get just three. Anyone who wanted to retire between the ages of 50 and 55 could have been entitled to smaller payments for five years, though that was at the firm’s discretion.
Under the amended package, which received the backing of 93 per cent of the partnership, those who made partner before October 2005 will be allowed to retire after 15 years as a partner. They will receive an annuity equal to 17 per cent of their final profit share for five years.
For those who have been a partner for 20 years or more the payment will be equal to 23 per cent of their final profit share, again paid each year for five years.
An annual payment cap of £276,000, which was introduced in 2005, remains in place.