Morrisons, the UK-based supermarket chain, is facing backlash over its plans to reduce employer pension contributions for its hourly paid staff. The company has announced a two-stage adjustment to its pension scheme that will see employer contributions decrease from 5% to 3% by March 2025, affecting around 60,000 workers.
The first phase, set for March 8, 2024, will equalize contributions at 4% from both employees and the employer. By March 2025, the second phase will come into effect, with employees shouldering a higher contribution rate of 5%, while Morrisons will reduce its share to 3%.
This move comes as Morrisons responds to new legislation that removes the £6,240 lower earnings limit for automatic enrolment into pension schemes. The supermarket claims that despite the reduction in its contributions, overall contributions will increase due to the changes brought by the Pensions (Extension of Automatic Enrolment) Act 2023.
However, Unite union's general secretary, Sharon Graham, has strongly criticized the decision. She accused Morrisons of "fleecing" its workers by increasing their pension contributions while cutting its own. Graham called the action "disgraceful" and a new low for a company that continues to be profitable. She also hinted at potential strike action if the changes go ahead.
Morrisons maintains that the proposed changes are justified and that it will engage in a formal consultation process until early January 2024 to discuss them with stakeholders. The company's spokesperson has countered Unite's claims by stating that overall pension contributions will rise as a result of auto-enrollment changes mandated by new legislation.
The union remains unsatisfied with these explanations, pointing out that there is no justification for such changes given Morrisons' profitable status and surplus pension schemes. With the consultation process ongoing, the situation remains tense between Morrisons and its workforce as the possibility of strike action looms.
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