The Tesco PLC Pension Scheme moved from a £2,121m surplus in 2022 to a £294m deficit in 2023, primarily due to movements in discount rates and gilt yields.

The group's preliminary results confirmed that the group now has an IAS 19 pension deficit, totalling £300m (post-tax), including £157m relating to the main scheme and £143m related to other group pension schemes.

However, the group clarified that the accounting surplus or deficit does not drive contributions to the pension schemes and "can be volatile".

The group also previously reached an agreement with the scheme trustee that no pension deficit contributions are expected to be required ahead of the next triennial valuation in 2025, after the actuarial valuation as at 31 March 2022 revealed a surplus of £0.9bn.

In the latest update, the group also confirmed that the scheme, which is closed to future accrual, remained in a funding surplus as at 25 February 2023.

Commenting on the preliminary annual results, Tesco chief executive, Ken Murphy, stated: “It’s been an incredibly tough year for many of our customers, and we have been determined to do everything we can to help.

"The resilience and agility that we have developed over the last few years has created a sustainable competitive advantage that leaves us well-placed to deal with any challenges that may arise.

"It has enabled us to deliver another strong performance across the group, whilst continuing to make strategic progress.

"Our focus on customer satisfaction, market share and free cash flow is working. It is delivering strong results and enabling us to re-invest in the business, maintain a strong balance sheet and return cash to shareholders.

"We have already bought back over £1bn worth of shares and have today announced a further £750m worth over the next twelve months. I am really confident that by investing to give customers the best possible value and continuing to look after our colleagues, we will create further significant value for every stakeholder in Tesco.”

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