Belfast Telegraph

Tesco staff must work longer for their pension

By Jamie Grierson

More than 170,000 Tesco employees face working up to two years longer to receive the maximum entitlement on their pensions.

The UK's biggest supermarket is opening a consultation with staff to raise the retirement age for its defined benefits pension scheme from 65 to 67 years.

However, the group will keep its pension scheme, which has 293,000 members, including 172,000 active workers, open to new members, unlike many of its FTSE 100 Index peers.

The change in retirement age does not mean workers are bound to keep working until they are 67 but their pension savings will be hit in most cases if they choose to retire earlier.

A spokesman for Tesco said: "We are keeping one of the best pension schemes in the UK and making some essential changes to ensure it is sustainable."

Tesco also wants to use the currently "cheaper" inflation measure - consumer prices index (CPI) - to calculate the annual increase in its contributions to staff pensions and switch from the higher retail prices index (RPI).

However, rather than set the maximum rise in any year at 2.5% as currently allowed by law, Tesco will keep the maximum rise at 5%. It hopes to bring in the changes from June 1 and said it believed they were necessary to limit risks such as unexpected rises in life expectancy.

The consultation on pensions comes as chief executive Philip Clarke fights to revive the company's flagging UK business. Mr Clarke hopes to cram a three-year overhaul into the next 12 months, including initiatives dealing with price and home delivery.

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