Sainsbury's-Asda merger won't put pension funds at risk, claims chief executive

In March the government dropped proposals to force companies carrying out takeovers to gain approval from TPR. The measures were designed to prevent pension scheme members losing out after transactions do not go to plan, as happened after the collapse of BHS in 2016.

Former owner Sir Phillip Green sold the high-street chain for £1 in 2015 but a year later 20,000 pension scheme members were moved into the Pension Protection Fund Scheme after BHS collapsed with a huge black hole in its retirement fund. Sir Philip was later forced to pay £363m into the fund to help plug the gap.

Mr Coupe said Sainsbury’s had notified the Pensions Regulator (TPR) of the deal and how it would impact pension scheme members. The regulator said on Tuesday that it was in “preliminary talks with all parties involved”. Under the terms of the deal, Asda’s parent company Walmart would retain responsibility for its subsidiary’s defined benefit scheme.

Sainsbury’s’ schemes had a combined deficit of £974m in March 2017, a gap that more than doubled after the takeover of ASDA in 2016.Asda’a had a shortfall of £408m the last time it was calculated in March 2016. Mr Coupe said that the deal "strengthens the pension covenant" and "protects the long-term interests of around 90,000 Sainsbury's defined benefit pension scheme members".