David Prosser: Sainsbury's pension plan will be copied

Outlook The move announced yesterday by Sainsbury to transfer £750m worth of property into an arrangement that will generate £35m of income each year for the grocer's pension scheme is an imaginative one. It should provide the scheme's trustees with greater security while also reducing the cost to the company of getting down the £1.2bn funding deficit in the plan.

Indeed, thanks to the property transfer, Sainsbury's has to raise its annual pension contribution by only £11m, despite the trebling in the size of the deficit over the past three years.

The deal does, however, have to be approved by the Pensions Regulator. There's no reason to think it won't be, but there will be plenty of other companies watching the decision. PricewaterhouseCoopers says more than 30 large employers are currently considering arrangements of this type, with assets worth more than £5bn potentially for pension funds. Much, then, rests on the Sainsbury's plan.