Tesco’s pension deficit rises to £1.8bn

Tesco’s net pension deficit increased from £1,407 billion in 2011 to £1,839 billion in 2012.  

The retailer attributes the change, revealed in its Preliminary results 2012/13, to a reduction in real corporate bond yields leading to a fall of 0.3% in the discount rate used to measure the organisation’s liabilities. 

Tesco was able to partially limit the effects of the pension deficit increase by making a one-off cash contribution of £180 billion in April 2012 into its pension pot. It also received higher than expected asset returns in 2012.     

In March 2012, Tesco announced it would switch to the consumer prices index (CPI) to calculate its defined benefit (DB) pension scheme contribution rises, and increase the age at which a full pension is paid by two years.

Tesco was unavailable for comment on its Preliminary results 2012/13.