Sainsbury’s staff could see their expected pensions slashed by more than half if they opt for a ‘cash balance’ scheme put forward by the supermarket last week according to independent experts.
The company has told staff that they must increase their contributions to more than 4.25 per cent of salary or be put in the cash balance section, it was reported.
Though Sainsbury’s will top up contributions by 9.75 per cent of salary independent expert John Ralfe has warned that employees choosing the cash balance option could be worse off when they retire.
In a research note for RBC Capital Markets Ralfe said that an employee with 20 years service on the current scheme will receive a third of final salary pension.
The same person would get less than half that in the new plan.
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