Asda pensions

Prec

Asda are proposing pension cuts. Colleagues currently paying 3% will see asda reducing their current matched stake to 2%. If colleagues increase their % to 5% then asda will kindly agree to give them the current 3%they already pay now.

If this was the royal mail there would be strikes all over and their union fighting it. I've not ever seen anything in the press regarding these cuts. As retail rights seem to be overlooked by everyone I see asda pushing this through without a blink.

As a mortgage owner with 19 years remaining, would I be better to increase my mortgage payments rather than increasing my pension. I'm 40.
Any advice?

HappyHarry

It sounds like Asda are falling back towards the auto-enrolment minimums.

From April 2018, the minimum pension contributions will be 5% (minimum of 2% for an employer, and the remaining 3% from the employee).

From April 2019, the minimum pension contributions will be 8% (minimum of 3% for an employer, and the remaining 5% from the employee).

(There are a few other rules about what counts as earnings, minimum earnings to qualify and age of employee, all of which are detailed here: http://www.thepensionsregulator.gov.uk/minimum-contribution-increases-planned-by-law-phasing.aspx)

So in 15 month's time, you'll be back to the 3% employer contribution anyway.

Malthusian

This is the inevitable and widely-predicted consequence of auto-enrolment. Employers who used to pay pension contributions higher than those specified by auto-enrolment are cutting contributions to the minimum level specified by the government (which will be 5% employee / 3% employer from 2019).

That's equality for you.

The GMB trade union claims they have thousands of Asda members so we'd have to ask them why they aren't doing the job their members pay union subs for. Just over ten years ago there was a battle between Asda management and the brothers over union recognition which was widely covered in the press, so we can't blame the media.

As a mortgage owner with 19 years remaining, would I be better to increase my mortgage payments rather than increasing my pension.

You are still turning down free money if you don't contribute 5% (assuming that's the maximum employer match), even if you are getting less free money than before. The answer is almost certainly no.

westv

I know it's not really relevant to the thread but does anybody else find it grates when companies write "colleagues" instead of "staff"?
Yes, I work with my "colleagues" but a company employs "staff"

Prec

It just feels like a kick in the teeth. Especially when shares rocketed the other day by 10% ish which gave the Walmart heirs a 12bn profit in 1 day. Welcome to the world of retail and minimum wage ha

PeacefulWaters

Prec wrote: »

It just feels like a kick in the teeth. Especially when shares rocketed the other day by 10% ish which gave the Walmart heirs a 12bn profit in 1 day. Welcome to the world of retail and minimum wage ha

This is what it will be about.

Having to increase base salaries ahead of inflation means other benefits get eroded.

Andy_L

Prec wrote: »

Asda are proposing pension cuts. Colleagues currently paying 3% will see asda reducing their current matched stake to 2%. If colleagues increase their % to 5% then asda will kindly agree to give them the current 3%they already pay now.

If this was the royal mail there would be strikes all over and their union fighting it. I've not ever seen anything in the press regarding these cuts. As retail rights seem to be overlooked by everyone I see asda pushing this through without a blink.

As a mortgage owner with 19 years remaining, would I be better to increase my mortgage payments rather than increasing my pension. I'm 40.
Any advice?

by paying the extra 2% you instantly get 1/2 of that as free money from ASDA. Its unlikely that overpaying your mortgage will get that sort of return.
Regardless, its likely that the 6% that was going into your pension wasn't enough for retirement so an increase to 8% is probally a good idea anyway

Malthusian

Prec wrote: »

It just feels like a kick in the teeth. Especially when shares rocketed the other day by 10% ish which gave the Walmart heirs a 12bn profit in 1 day. Welcome to the world of retail and minimum wage ha

When the shares dropped by 35% in 2015 did you volunteer for a pay cut to help the Walmart heirs get over their $22 billion loss?

Assuming you didn't, what changed since 2015 that meant their finances affect you?

Prec

I wasn't aware they dropped 35% did that mean the major shareholders still didn't make massive profits or did they just cut hours and make people redundant to cover their loss? With more redundancy due in the coming months too. It's just a little frustrating

bluenose1

Prec wrote: »

I wasn't aware they dropped 35% did that mean the major shareholders still didn't make massive profits or did they just cut hours and make people redundant to cover their loss? With more redundancy due in the coming months too. It's just a little frustrating

I would be frustrated as well. Unfortunately organisations care more for their shareholders profits than giving their employees a fair wage and decent pension.
Are you allowed to pay extra into your pension? If so you need to consider if it would be better to do this than pay more towards your mortgage. The tax you save makes paying more into a pension very appealing. If Asda offer salary sacrifice it is even more beneficial as you don’t pay the National Insurance.
Good luck.

badmemory

As the normally recognised level of pension contribution is a percentage equal to half the starters age, then auto enrollment is totally useless for providing adequate income in retirement. As the maximum is going to be 8% (total of employers & employees contribution) then you would need to be in full time pensionable employment by 16 not 21, an extremely unlikely scenario.