That means many employees face old age with less financial security than they expected  and they are the lucky ones who actually get a pension.
Pensions are a problem in the food industry where the high proportion of low earners and part-timers, particularly in retail, mean proportionately few staff join the schemes.
Grocery industry charity Caravan believes most workers in the sector are missing out. Director general Graham Kirker says: "Unless we do something now, in 20 to 30 years' time there will be an awful lot of people who haven't made sufficient provision."
Caravan reckons that 80% of employees earning between £10,000 and £20,000 are not in a pension scheme and Kirker believes good, well advertised plans would help to attract and retain staff. "It would help our industry compete with the hospitality sector, for example," he says.
One scheme that was considered generous and a help in attracting staff was the John Lewis Partnership scheme open to Waitrose staff.
John Lewis chairman Sir Stuart Hampson had trumpeted its final salary scheme as a point of difference, but that looks set to change. The firm's pension contributions have been adding up to 10% of the total payroll, so in a bid to cut costs it is proposing to bar new members until they have worked for the partnership for five years.
Many other food retailers and manufacturers have either swapped to defined contributions or have a hybrid scheme whereby senior executives only have access to a defined benefit scheme. Only this week Uniq closed its scheme to new members while Morrisons now has a final salary pension scheme in a separate fund along with a stakeholder pension scheme which staff starting work with the company after September 2000 will join.
Donald Duval, president of the Society of Pension Consultants, says Tesco and Sainsbury's new schemes are less generous and that a big, successful company is no indication of a good scheme. "Of course a firm's relationship with its employees is important, but does it plough money back into pensions or pass profits to shareholders? "Everyone's worried about pensions -Â especially as there are very poor investment returns at the moment. A company that gives people a lot of assistance will have an advantage."
Unilever is perhaps a good example, where staff have been on a pension contribution "holiday" since 1991. It's only this year that existing members have been asked to contribute 2% of their salary.
Sainsbury's historical position as market leader has given it more members than most and many staff have stayed longer with the firm. It is likely to feel the pinch in the future, particularly because, as one City analyst says, it has the biggest hole in its pension fund.
"It invested heavily in equities which crashed badly, compared say, with Tesco, which invested a high proportion in bonds which have not fared so badly."
A depressed stock market puts pressure on companies to increase their contributions to schemes. And the fact that people are living longer is something the companies are taking into account when agreeing contributions. Although most are shouldering the burden, Northern Foods, for one, is asking staff to pay up in a bid to meet the extra costs and protect the final salary pension scheme. It has promised to continue paying an amount equivalent to 10% of its employees' salaries, but staff are being asked to increase their contributions from 5% to 7% of pay. "We believe a good pension scheme is popular and will enable Northern Foods to recruit and retain good employees," explains chief executive Jo Stewart.
Hazlewood Foods is on a similar wavelength. It is keeping its scheme open to all employees and has approved increases in contributions from employees of 1% this year and a further 1% next, matched by the company.
Tesco meanwhile, is proud that its new pension-builder scheme is available to all staff. A spokesman says: "This is the first time a defined benefit scheme has been made available to part-time and temporary staff. "
Deborah Cooper, senior consultant at Mercer Investment Consulting, says the food and drink industry gives less to defined contribution schemes than most other industrial sectors, but is at least offering solutions after closing defined benefits schemes."There are quite a few career average schemes, such as Tesco and Safeway. They're fair  you get an index-linked proportion of your annual salary when you retire."
But Cooper warns nothing is guaranteed. "You don't think anything bad will happen to a company such as Tesco and you might feel secure about your benefits, but even defined benefits scheme aren't devoid of risk."
{{ANALYSIS }}
Pensions are a problem in the food industry where the high proportion of low earners and part-timers, particularly in retail, mean proportionately few staff join the schemes.
Grocery industry charity Caravan believes most workers in the sector are missing out. Director general Graham Kirker says: "Unless we do something now, in 20 to 30 years' time there will be an awful lot of people who haven't made sufficient provision."
Caravan reckons that 80% of employees earning between £10,000 and £20,000 are not in a pension scheme and Kirker believes good, well advertised plans would help to attract and retain staff. "It would help our industry compete with the hospitality sector, for example," he says.
One scheme that was considered generous and a help in attracting staff was the John Lewis Partnership scheme open to Waitrose staff.
John Lewis chairman Sir Stuart Hampson had trumpeted its final salary scheme as a point of difference, but that looks set to change. The firm's pension contributions have been adding up to 10% of the total payroll, so in a bid to cut costs it is proposing to bar new members until they have worked for the partnership for five years.
Many other food retailers and manufacturers have either swapped to defined contributions or have a hybrid scheme whereby senior executives only have access to a defined benefit scheme. Only this week Uniq closed its scheme to new members while Morrisons now has a final salary pension scheme in a separate fund along with a stakeholder pension scheme which staff starting work with the company after September 2000 will join.
Donald Duval, president of the Society of Pension Consultants, says Tesco and Sainsbury's new schemes are less generous and that a big, successful company is no indication of a good scheme. "Of course a firm's relationship with its employees is important, but does it plough money back into pensions or pass profits to shareholders? "Everyone's worried about pensions -Â especially as there are very poor investment returns at the moment. A company that gives people a lot of assistance will have an advantage."
Unilever is perhaps a good example, where staff have been on a pension contribution "holiday" since 1991. It's only this year that existing members have been asked to contribute 2% of their salary.
Sainsbury's historical position as market leader has given it more members than most and many staff have stayed longer with the firm. It is likely to feel the pinch in the future, particularly because, as one City analyst says, it has the biggest hole in its pension fund.
"It invested heavily in equities which crashed badly, compared say, with Tesco, which invested a high proportion in bonds which have not fared so badly."
A depressed stock market puts pressure on companies to increase their contributions to schemes. And the fact that people are living longer is something the companies are taking into account when agreeing contributions. Although most are shouldering the burden, Northern Foods, for one, is asking staff to pay up in a bid to meet the extra costs and protect the final salary pension scheme. It has promised to continue paying an amount equivalent to 10% of its employees' salaries, but staff are being asked to increase their contributions from 5% to 7% of pay. "We believe a good pension scheme is popular and will enable Northern Foods to recruit and retain good employees," explains chief executive Jo Stewart.
Hazlewood Foods is on a similar wavelength. It is keeping its scheme open to all employees and has approved increases in contributions from employees of 1% this year and a further 1% next, matched by the company.
Tesco meanwhile, is proud that its new pension-builder scheme is available to all staff. A spokesman says: "This is the first time a defined benefit scheme has been made available to part-time and temporary staff. "
Deborah Cooper, senior consultant at Mercer Investment Consulting, says the food and drink industry gives less to defined contribution schemes than most other industrial sectors, but is at least offering solutions after closing defined benefits schemes."There are quite a few career average schemes, such as Tesco and Safeway. They're fair  you get an index-linked proportion of your annual salary when you retire."
But Cooper warns nothing is guaranteed. "You don't think anything bad will happen to a company such as Tesco and you might feel secure about your benefits, but even defined benefits scheme aren't devoid of risk."
{{ANALYSIS }}
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