Hi,
Just out of interest, when the career average DB scheme closed in 2015 - what were the contributions for both employee and employer at the time?
Your contribution was 5% and tesco put in 10%
So a total of 15%
Great pension scheme.
Although I'm not surprised it ran up such a huge deficit on 15% contributions.
It's a real shame they'll most likely never even think of bringing it back, even with maybe a higher 7.5% contribution.
Tesco does match your contribution up to 7.5%, though not as good as it used to be, it is still pretty good in comparison to other places, not as good as Civil Service Pensions or some very competitive pension schemes in professional industries, but still very good overall.
new pension scheme is rubbish compared to the old one. new one is basically a savings plan that you rely on stock markets ups and downs and at the end you have to buy a pension on open market. no guarantees at all.
Quote from: NightAndDay on 03-01-23, 10:39AMTesco does match your contribution up to 7.5%, though not as good as it used to be, it is still pretty good in comparison to other places, not as good as Civil Service Pensions or some very competitive pension schemes in professional industries, but still very good overall.
In your opinion, would it be much more beneficial to transfer both the old and new Tesco pension schemes to a current employer's pension scheme, such as the Civil Service one?
No, because generally you lose any contributions your ex-employer put in to your workplace pension scheme that you had with them if you transfer it out.
Also it's better to have multiple investment experts running your various pension funds, though they'd have similar strategies (assuming you've not chosen a risk profile) they do vary in which low/conservative risk fund they put your money in to, it's a good way to diversify out risk.
NightAndDay I must admit now I am starting to find your posts beneficial to the topics discussed and more balanced,as opposed to the previous rhetoric about wanting Tesco to fail. This is not a dig at all and more intended to complement your posts as I can see now by you working for the company again in a different position you have adopted a different perspective 👍
Thank you Dougall, I do generally want what's best for the hard workers on the shop floor and the low paid, I still have my concerns about store operations and can only hope the pay, people and safety side of it has improved from when I was working in that area, as nice and refreshing as it is to work in an environment in which you are treated with respect and dignity and are well compensated, I don't like how many office staff have never worked on the shop floor and are oblivious to the sort of things that go on there. It really is a drastic difference between both work environments and I really do empathize with those who've had a bad run if it on the shop floor side.
Quote from: brucie on 05-01-23, 11:54AMnew pension scheme is rubbish compared to the old one. new one is basically a savings plan that you rely on stock markets ups and downs and at the end you have to buy a pension on open market. no guarantees at all.
Though not as good as the old one, it is from what I've seen still the best in Retail, certainly better than the competition, as much as I tend to criticize Tescos compensation package overall, the pension scheme is actually good.
Also the vast majority of pension schemes work like that, the worst case scenario if your pension goes to zero, the government has a pension protection fund that will recover all if not the majority of your pension, if you do nothing, your pension is managed by investment experts employed by the likes of Legal and General and Experis, you get charged an admin fee every month (a token fee usually proportional to your contribution) and they invest in a fund, depending on many factors, these could be conservative moderate risk funds such as a global equity fund, which will be typical if you're at a young age and the macroeconomy is doing well or a low risk growth fund which is more typical when you're getting on (typically 15+ years of contributing) and the macroeconomy is in a state like it is now where interest rates are increasing, all of these "funds" are a collection of assets and investments, the lower risk ones will have things like bonds and low risk investments, funds like the global equity fund would be a diversified collection of conservative-medium risk investments.
Over the long term, the trend for your funds are more likely to go up than it is down, and when it does go down, it usually isn't for very long.
"Experts". Come on take a look at your scheme I bet it lost lads last year, mine creatively did. As for best in retail. It's the same as all the rest. The Union sold us down the river when they let Tesco close the scheme.
Mines dropped but is still up overall, the main Retailers pension schemes aren't as good as Tescos current one.
Quote from: Attilla on 09-01-23, 09:46AM"Experts". Come on take a look at your scheme I bet it lost lads last year, mine creatively did. As for best in retail. It's the same as all the rest. The Union sold us down the river when they let Tesco close the scheme.
Out of interest what do you suppose the union could have done to stop them?
Absolutely nothing that could be done. Virtually all private pension schemes had their final salary/defined benefit schemes closed because in effect they have become increasingly unaffordable as people's life expectancy has increased.
The current scheme - defined contribution - i.e. the amount contributed by the employee and the employer is "fixed" (defined) - albeit it tends to be "a % of salary" (so not quite fixed but sort of)
The entire risk of a DC scheme is on the employee - whereas a defined benefit (e.g. when you retire after 30 years we promise you a pension of £15k a year) the risk is on the supplier/employer.
Is Tesco's scheme "more generous than others" ?
I don't know the details of others - so cannot comment.
By law, Tesco have to contribute at least 3% to our scheme - so the fact that they can contribute 7.5% (assuming we do too) is a little bit above and beyond the absolute minimum.
But in terms of how much pension will we have when we retire - this depends on the performance of our "funds" being invested - but clearly having any sort of employer contribution helps "bump it up" - plus the added benefit that we get tax relief on our contributions (assuming you earn enough to pay tax!)
Quick Google search brought this up:
How much do Sainsburys pay into pension?
When you choose to pay more, these are called 'Step Up' contributions. You pay 4%, 5%, 6%, 7%, 7.5% or more of your Step Up pensionable pay and Sainsbury's will pay in the same amount up to a maximum of 7.5%.
So - Tesco are no more generous than Sainsbury
Tesco did have the best pension scheme back when it was 5% and 10%, even with the transition to matching up to 7.5%, Sainsbury's, Morrisons and the rest were well behind, this step up pension Sainsbury's is doing must be relatively recent, I remember when it was 3.5% that they'd match.
I do know the discounters pension schemes aren't great. Times have changed, but I still stand by my statement, even Tescos current pension scheme is good compared to many employers, even outside of Retail.
The thing people tend to forget with pensions is the sooner you start paying in the bigger your funds will be when you retire. Even if you pay in the bare minimum as a 25 year old you are still saving towards a pot you will need in 40+ years time. Whereas when people actually start thinking about retirement in their 50's and 60's it's often too late to build up a sizeable pot.
If you ever leave Tesco you can either freeze your pension or transfer it to your new employer.
I left Tesco and came back and it's still made money when I left for 3 years and didn't contribute anything, it's often the case not worth transferring your pension and leaving it untouched as many schemes result in the loss of employer contributions if transferred out.
Pensions are a long term investment and unless society collapses, it will in every likelihood be more than what you and your employer has put in.
I wouldn't advise freezing your pension, inflation will eat away at it's value.
Apologies to bump this thread.
However, I have the old Tesco pension scheme pre 2015 and it currently forecasts to pay £5k per annum at age 65 with a CETV transfer value that goes from £80k to £125k every time I have requested a transfer value (once a year roughly)
I have always just decided to leave it be, but is that the right thing to do? Does that 5k change at all??? I have been trying to read and find out whether any of my values above will increase between now and age 65? Or does it just sit still for the next 20/25 years?! Hence me thinking I should move it....
I know i am going on a little tangent here but i work in a DC and there are a few of the guys transferring their pensions out of Tesco to a private pension, i have been told it is due to getting what your family are entitled to if you die.
Apparently if you pay in 7.5% and Tesco pay in 7.5% you obviously have a pension pot, and as this pension is YOUR pension, not your families, if you were to die the family would only get half of the pension pot, this is due to Tesco paying into YOUR pension for YOUR retirement, once you die Tesco takes back what they paid in as your are dead, your family only gets what you "the employee" has paid in as this has come from your wages.
Any truth in this?
I very much doubt that it is true for the current workplace pension scheme as that would reduce the employer contributions below the legal minimum & there's certainly no mention of it on either the Tesco or L&G websites. It may be that there's some benefit in moving the older closed scheme, but wouldn't do so without seeking professional advice rather than on the gossip going around store/depot!
Ok bit of a dilema here. Left Tesco in 2015, i was a team leader at the time, but after 32 years service felt it was the right time to leave. I was in the old pension scheme (final salary). Im 58 now and have just recieved a statment telling me i can have just over £10k a year, obviously going up slightly with the cost of living etc etc. Whilst the projected income in say 8 years when i retire is possibly gonna go up to say £15k and coupled with an old age pension of say £12k, i think i could live easily off this amount. My dilema is do i take the £10k ish now and drop a day at my current work place or wait to see if the pension matures further in a couple of years ??? if anyone else has done this ie: dropped a day at work and took their F/S pension i would be interested to see if it worked for you.
I could take a lump sum and reduced pension but feel this is not right for me at this particular time. I have no health issues at the moment and the mortgage is paid off.
Look forward to hearing if anyone else in a similar position has been through the same dilema?? thanks
My view is that you take the drawdown pension which would be the tax free 25% lump sum and a reduced yearly pension. Enjoy your money now, you don't know what's around the corner when you get to our age (I'm 56).
Quote from: flour technician on 09-08-23, 05:56PMOk bit of a dilema here. Left Tesco in 2015, i was a team leader at the time, but after 32 years service felt it was the right time to leave. I was in the old pension scheme (final salary). Im 58 now and have just recieved a statment telling me i can have just over £10k a year, obviously going up slightly with the cost of living etc etc. Whilst the projected income in say 8 years when i retire is possibly gonna go up to say £15k and coupled with an old age pension of say £12k, i think i could live easily off this amount. My dilema is do i take the £10k ish now and drop a day at my current work place or wait to see if the pension matures further in a couple of years ??? if anyone else has done this ie: dropped a day at work and took their F/S pension i would be interested to see if it worked for you.
I could take a lump sum and reduced pension but feel this is not right for me at this particular time. I have no health issues at the moment and the mortgage is paid off.
Look forward to hearing if anyone else in a similar position has been through the same dilema?? thanks
With a recession highly likely in the next 2-3 years, you've got 2 good options.
1. Take the money now if you can live on £10k a year, you'll also get state pension in 7-8 years or so. If you can live on that, it's not a bad option.
2. Retire in at least 10 years from now, a recession means that pensions will be taking a hit (unless you've got a gold standard old style public sector pension) and will take a few years to recover, in 10 years time it should recover and be in quite a strong position.
I have the old Defined Benefit pension sat waiting for me. Although I am concerned. I requested a value and it stated £5k per annum for life from age 65 with a transfer out value of 120k if I wanted about 3 years ago. It now says £5k per annum for life from age 65 with a transfer out value of £55k if I wanted. Does the 5k just sit there and not increase in value between now and retirement age?
Also, why has the 120k become less than half of what it was
Most pensions these days are managed investments, you pay an admin fee every month to Legal and General (The company that manages Tescos Pensions) that is taken out of your pension pot (the admin fee is based on the growth performance of your existing pot) in exchange for L&G to manage your fund, they have a fiduciary duty to act in your best interests when it comes to pension growth.
You should be able to see the underlying investments that constitute your pension somehow, I know how to do this for the current scheme but not the old one, when they closed it off, they sent out a pretty comprehensive set of documents but can't remember the information.
The market is stuttering at the moment, it could be that your pension will recover when the economy returns to more favourable conditions, which doesn't look to be the case until 2025,.