Legal Business

Shearman abandons defined-benefit scheme to defuse pensions time bomb

While some US law firms have long ignored mounting pension liabilities, relying on annual profits to pay retirees, Shearman & Sterling has become the latest firm to alter its pensions system to limit future payouts.

Shearman’s 200-strong partnership has voted to remove defined-benefit pensions for future partners, a plan that typically hands retirees an annual payment based on a percentage of their final ‘salary’.

The change was introduced in the middle of October and affects any new partner, whether a promotion or a lateral hire.