17 May 2006
Members of the J Sainsbury pension plan are being asked to
increase their contributions or be switched to a lower level of
pension.
Approximately one third of the 23,500 members of the J Sainsbury
pension scheme are in the final salary section of the scheme. These
people are being asked by the firm to increase their pension
contributions from 7% to 10%, or move to the career average section
of the scheme, with annual benefit increases linked to inflation
not salaries.
Around two thirds of the members of the scheme are already in
the career average section. These members are being asked to
increase contributions from 4.25% to 7%. Those that do not choose
this option will be automatically switched to a cash balance
pension, which according to sources is a defined contribution plan
in all but name.
Under the cash balance scheme employees aged 60 could lose two
thirds of their benefits, while 45-year-olds could lose three
quarters of their pension. This pension would cost Sainsbury's
around half as much as the career average plan.
Sainsbury's has asked for a decision from its employees by
September.
