The total deficit of Tesco’s pension schemes fell by £400m to £2,300m over the past year, as of 23 February 2019, according to its final financial results report.

Its deficit reduction was primarily driven by “continued deficit contributions in addition to strong asset performance”.

Tesco’s pension scheme deficit contributions increased from £245m to £266m during this period, while its assets rose from £13,235m to £15,054m.

The schemes’ liabilities also increased, from £16,517m to £17,862m, although this was not enough to offset the rise in assets.

Its report also revealed the company had paid a non-cash charge of £43m following the high court ruling on guaranteed minimum pensions (GMP).

Net pension finance costs decreased by £73m year-on-year to £89m, and was “driven by a lower opening pension deficit, partly offset by a higher discount rate”.

For 2019/20, net pension finance costs are expected to decrease to around £72m.

The principal Tesco defined benefit pension plan is the Tesco PLC Pension Scheme, which is closed to future accrual.

On 5 March 2018, the Group acquired Booker, which has three defined benefit schemes. The Booker Pension Scheme, closed to future accrual, is the primary scheme, with two smaller closed schemes relating to retail partners Budgens and Londis.

The last Booker Pension Scheme triennial valuation showed a funding deficit of £41m at 31 March 2016, with agreed contributions of £5m per annum for six years from 1 April 2017. No contributions were required for the Budgens or Londis schemes.

Share Story: