As this is a topic that concerns both Stores and DC's I've brought the topics, already opened, together here into All Depts and copied the posts over.
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F R O N T -2-4-2-
Tesco has seen hundreds of millions of pounds wiped off the balance sheet due to the treatment of employee benefits under IFRS.
Net assets fell by £400m, mainly due to a £735m hit in accounting for its pension deficit
this has been kept quiet we had the pension women around at our store trying to get people to sign up, she never mentioned their was 735 million deficit even when asked, she said tescos is the most healthy pension anyone can have.
any one got any ideas to what scam they gonna pull to get the 735 back?
next year it will be more than 735 million.
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The Mrs
This wasn't kept quiet, it was widely published in May 2005. The article reads the same everywhere : http://www.accountancyage.com/accountancyage/news/2135615/tesco-shows-big-pension-deficit
The first line actually says "IFRS brings Tesco's pensions deficit onto the balance sheet, but overall effect is minimal".
This isn't anything of Tesco's doing. It's just a new way of reporting balance sheet items. To understand IFRS you first need to understand FRS 17 :
http://www.barnett-waddingham.co.uk/cms/services/actuarial/accounting/news01023/viewDocument
Then look at IFRS:
http://www.apinfo.co.uk/ipfa/articles/accounting_for_pension_costs.htm
It's no wonder your pension lady never mentioned it ... if she had told you all of the above information how many people would actually understand it?
I'd still recommend joining the Tesco pension scheme to everyone, as would every finanacial advisor I've spoken to.
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fatty
AHHH, after spending the last four hours i see what you mean! So we are ok then!Im happy to see that TESCO put an EXTRA 200 million into the pension fund last year.
From my understanding tesco is still regarded as one of the best retail pension funds. As i only came to work for tesco for a few months SIX YEARS AGO, im glad to hear it!
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Living the values
My main concern about Tesco's pension scheme is that only 1% of it is invested in cash, the rest is invested in shares, property and bonds. There's only so much longer property can continue to rise, and while shares can give a good return, i'd like a bit more of our pension money invested in cash which may give less return but is less risky in the long term.
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Brownfish
My concern is that when pension schemes say they have invested in property it sometimes means that it has pushed funds back into the host company to pay for developments. The store you work in may be funded by the pension scheme rather than the main business. It's OK aslong as the ownership is clear - not that Tesco is about to go belly up.
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fatty
So what would you all invest in? You all can take part by standing to be involved in the pension fund, leaflets are in your store now.
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The Mrs
Cash investments are only any good in the short term. Read this:
http://www.pathtoinvesting.org/categories/choosinginvestments/cash/cash_071.htm
You CANNOT make a pension scheme work with cash investments.
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jfp
Financial advisors always reccommend company pension schemes because of all the benefits tied in with it. e.g. death in service.
The statement "our scheme is one of the best" ranks alonside "your cheque is in the post"
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spirit
Bearing in mind that Tesco made 2 billion pounds profit last year and could if necessary plug any shortfall with a single hit.
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F R O N T -2-4-2-
SPIRIT do you think the shareholders who want a return on their investments will be happy for tescos to blow their cash on pensions?
the tesco pension bill is going up the profits will not stay a record levels forever they will level out but the pensions are increasing to fast to keep up.
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Never Mind
OK, so it's not perfect, but does anyone know of a better pension scheme out of the Civil Service?
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Living the values
The issues not if there are any better pension schemes out there or not, the bigger issue is how much longer are company pension schemes maintanable, especially as the population gets older, and as companies get ever more efficient will need less staff as years go on, meaining less employees to pay in to pension pot
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F R O N T -2-4-2-
does anyone remeber the letters a few years ago about getting less in your pension when you retire because the equitable life fiasco?
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Sanmay
Being nearer to retirement than most of you, all this interests me greatly.
My understanding of the Equitable Life 'fiasco' which patently wasn't our firm's fault, is that it only applied to parttimers who had money purchase schemes. I was one of them and I honestly don't seem to have come out of it too badly. They took their time thinking it through and now all the money put into that scheme has been transferred to the new scheme. This, apparently could not have been done before with the old pension scheme.
Dozens of firms have now finished the final salary schemes they were running, some for all employees, some for newly appointed employees. Tesco seem to have chosen the middle path. In its favour the new scheme is the same for part timers and full timers and all monies are transferable I believe so if you swop from part to full time and vice versa you don't lose out.
I don't think that the firm are on their own having pension problems. People are living longer, it costs more to live now when you're retired especially since darlin' Maggie changed the state pension from earnings related to inflation related.
I don't pretend to understand it all properly. I just know that I can't afford to retire yet with all the utility and council tax bills going up, the outs are bigger than the ins.
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F R O N T -2-4-2-
I see what you're saying about the fiasco with Equitable Life,
However I can't see how you came off better...
I for one received in my letter from tescos that on the date of my retirement I would be getting less than previous stated because of financial irregularities on behalf of Equitable Life.
No matter whose fault it is tescos put my pension money into a bad gamble and it has a direct negative result financially for me.
So if tescos can make a mess once who's to say they will not do it again?
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Sanmay
I didn't say I came off better, I said I didn't come off too badly. Under the old scheme I would have had a little part time pension and a slightly larger full time pension. Now they are all rolled into one, which although not fantabulous is better than it could have been.
Lots of people lost all of their pension money, so I guess we should be thankful for small mercies. When you play the stock market it's always a gamble and absolutely nobody, not just Tesco's, knew that Equitable Life had overextended themselves and promised too much.
At the end of the day 242, could you have done better if you had chosen to go with a private pension. Who's to say you would not have chosen Equitable Life to invest your fund in. There are no gold plated guarantees that say we are all going to retire with pots of money and no worries.... I wish there were I really do
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fatty
So how can we safegaurd our future? Well as i have nearly 30 years to work before i retire i have made a decision to learn as much as i can about pensions. I will increase my AVCs and try to keep upto date with current leglislation, failing that i will ASK THE MRS, as the websites she mentioned worked out very usefull.
How many of us understand about pensions? Do we realise that we are investing in the stockmarket 10, 20, 30, 40, years in advance! When i look at my parents pensions im worried and so should we all be, we have more information than they had, so use it and be carefull. Take part, and regulate our company scheme, look after yourself for the future.
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F R O N T -2-4-2-
2 Points i would like to ask if you leave tescos you cn transfere your penion ....but how much of it?
why can you not transfere into tescos ?
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Sanmay
Don't quote me on this 242, but I believe you can transfer the present pension scheme to another firm if you leave. I'm not sure about transferring in. This apparently was supposed to be the clever part of the new scheme, the old one was neither transferrable to or from. Mind you I suppose it also depends on the scheme you are transferring to.
Fatty, AVCs are a good thing for someone your age I think, as long as they are not free-standing AVCs. The firm used to equal and add to any AVCs you paid in at one time, not sure now. Weren't they asking for members of staff to be trustees of the pension scheme at one time. That would be a good thing to be. I remember him indoors being one at his old firm, he learned an awful lot about pensions in the process, courses were attended etc etc
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champs
I'm a bit concerned at the moment about the national craze of big companies getting rid of their end off salary pensions.
I am sure that Tosco's as a successful company would not even conceder this but if they did I am sure we would unite to show them that they were making a mistake.......
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The Guvnor
I too have the same concerns. I would no doubt agree that if the pension scheme were to be done away with then we may have the pleasure of know before the city got wind of any major changes to the scheme.
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nesbitt
ask youre union reps guys---pensions have been on the menu all last year,they are being looked at!!!!
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TONKA
They already have made some changes to the pension.Did you all have a letter early last year about the final salary and the new smart pension??.
How many answered the letter and wrote back saying that they did not want to change, because if you did not reply you aint on the final salary anymore.
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bushido
Funnily enough Tonka, in the briefing it said that you could have a pensions expert in from Head Office to explain it all, which I and another Union rep requested.... no one showed up so we all opted out of pension builder and stayed on final salary
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fatty
From what i read in the papers our fund is about £600 million short. Last year tescos put in an extra £200 million and i hope they at least do the same this year!
Im to young to think about pensions, im only 21 years old plus tax!
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shafted
at last, a topic that no matter what union you are in and even if you are a scabby non member this is going to affect all tesco people and one we should ALL fight together.so if you are a non member join today cos "unity is strength".
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Have you all received "Your Tesco pension - in the bag"?
Contribution increase of 1%.
I'm not surprised. But at least it's staying. According to Tesco's financial statements it needs to increase contributions for 10 years to cover it's acturial shortfall.
Tonka ... I couldn't remember receiving a letter last year, definately didn't reply to one, so I checked by ringing the pension helpline ... and Tuggie is still in the Final Salary scheme.
The Mrs (Administrator)
Having consulted a financial advisor recently, I asked them to look over my Tesco Company Pension. The advisor was genuinly impressed with the pension scheme as it currently stands for full time staff (not sure how it duffers for part timers). I would not consider moving my pension, unless I left the company!
HE WHO DARES DOESN'T ALWAYS WIN, BUT THEY ALWAYS GET THE BOOBY PRIZE!
Am very pleased with my pension and would never have considered joining the scheme that Morrisons ran but jumped at the chance to join up to tesco pension. Can't be beaten I think (unless someone out there knows different of course)
Luv my Southern Soulmate
As long as theres money in the account in 20 years when i finish, il be a happy bunny ;D ;D
Heaven never forsake's those who try !!!!!!
I was quite fortunate to have started my pension in my teenage years, so it is going quite nicely as we speak.
As the hurricane said i also seen a finical adviser and he told me to stick with that pension,because it is probably the best one out there.
Well, since I have moved jobs, I am expecting a letter about my pension, not sure if they will freeze it or what, anyone help here?
I am not a number! I am a free man!
Why not give them a ring SJ ...try the helpline 01992647810.
Mon-Fri 8am-8pm...Sats 8am-1pm:)
Sanmay (Moderator)
I'm laughin, I'm laughin
Thank you Sanmay, I will, watch this space...
I am not a number! I am a free man!
My mother told me what I needed to know in the end. I tried to ring the phone number within the times stated, and got this response:
"Hello, we are unable to take your call, and you are unable to leave a message, please call back tomorrow" click, beeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeep.
How helpful.
I am not a number! I am a free man!
Got a letter about my pension the other day, I chose to leave it where it was for the time being. Second time though I have been sent a letter requesting a response, but got no prepaid envelope inwhich to do so...
Ketchup does not hide pepper...
i think anyone who joined before 2001 is on final salary pension which is protected by law.anyone who joined after that date is still protected by law now,but isnt as financially rewarding.inflation,success etc. final salary i thought was that they take an average wage of your last 2 years service.the new one is they double your contribution which goes into a pot.i assume they dip in and top up each year as the business requires.this is what im led to believe,if anyone knows more please share.
Are there not some situations where Tesco double matching your contribution is better than final salary? ie I put in £88 but get tax relief so I only pay about £60 net, so for my £60 I am getting £264 into my pot each month.
The pension fund is now as im sure you are aware undergoing its three yearly review. I wonder how it is faring in this economic climate?
Letters are out. They are proposing a 1% increase in employee contributions spread over two years, .5% from April 2009 and .5% from April 2010.
here s a thought for everyone If tescot has 250 000 UK based staff each paying into the pension scheme and tescot keep making DC tescot staff redundant replacing them with agency staff who are not based in the UK, they are not paying into the staff pension scheme then there's going to be a short fall, and who is going to make up the difference, it's going to be the staff that are left working for tescot. So in a short period of time our contributions are going to increase to about 10% just to make up the shortfall (?)) (?))
Of course they also will get less of a pension as they no longer work for the company :'( :p:
So in the letter it said they want the employee contribution to go from 4.75% to 5%
and the Tesco contribution will go to 11.1%.
What is that up from then? if it 0.25% and not 0.1% I would be surprised, do they
think people are stupid and that they wont notice they haven't said what the increase for
them will be.
http://freshneasybuzz.blogspot.com/2009/04/on-heels-of-global-retailers-fiscal.html (http://freshneasybuzz.blogspot.com/2009/04/on-heels-of-global-retailers-fiscal.html)
QuoteJ. P. Morgan said it believes Tesco's debt will exceed its targeted amount of £8 billion (pounds). The global retailer also has a current corporate pension fund deficit of £838 million (pounds). In its note, the investment bank says it believes the pension fund deficit has soared to £2 billion (pounds).
my husband being paying his pension for 30yrs uniq, he just been told not much money left in pension. he also paid to have another pension from work to top it up. which has been frozen
As at February 2009, under the IAS 19 methodology of pension liability valuation, the scheme had a deficit on a post-tax basis of £1.1bn (last year £0.6bn).
Tesco Press Release
TESCO has told 26,000 former staff to expect an annual pension rise of just 0.1 per cent this year — despite record £3BILLION profits.
A letter seen by Sun City reveals the increase was slashed to reflect a "considerable" slowdown in inflation.
The store giant, famous for its Every Little Helps slogan, uses the Retail Price Index as the basis for calculations. And it insists staff are not being short-changed.
Pensions administration manager Judith Murray said the rise had averaged nearly 3 per cent over the past five years. Last year's was 4.1 per cent.
But her letter explained: "As you may be aware inflation has been slowing down considerably — and so your increase is lower than in previous years." Other firms are almost certain to be under the same pressure to act.
Union officials said Tesco would be constrained by the £275million deficit in the pension scheme. But the letter arrived on pensioners' doormats just days before yesterday's bumper results were announced.
One ex-employee said: "It's a joke." Tesco profits were up 10 per cent to £3.1billion in the year to March on a 15 per cent sales jump to £59billion.
The Sun, 22/04/09
I assume the "union officials" are USDAW. Whoever it is, they are quoting deficit figures of two years ago. 8-)
Barclays close final salary pension to existing members, BP close final salary pension to new members.
UNITE say: ""It's outrageous and totally unacceptable for employers with good long-term prospects to use the recession as an excuse to cut pensions. Unite will fully support its members if they decide to stand up to employers hell bent on eroding pension benefits during the recession."
Morrisons close final salary pension - USDAW agrees.
>:(
Dunno if it is relevant but my pension payments, due to a technical error, were not deducted during the bank holidays. Now they are going to deduct the full amount from my next wage payment. Sincere apologies were given and If I have any queries I should contact my PM.
Going off thread and on a tangent, I hate the Cardinal card. If I have slightly less on it than will buy me some food or other then it is money in Tesco's pocket gathering interest.
How many thousands of people have money in their Cardinal card that they cannot use but Tesco can?
I am about to fill in the pension scheme application form. There are two boxes, I have to tick one of them. One says "I want to sacrifice my pay to be in the scheme", the other "I want to pay normal contributions". What is the difference?
There is quite a good explanation of Salary Sacrifice, the advantages and disadvantages here :-
http://www.pensionsadvisoryservice.org.uk/personal--stakeholder-pensions/group-stakeholder-pension-schemes/salary-sacrifice (http://www.pensionsadvisoryservice.org.uk/personal--stakeholder-pensions/group-stakeholder-pension-schemes/salary-sacrifice)
can you still op out of the pension? i know every been auto op'ed in but are you still able to op out like you was before?
sammy,,,
yes you can,, This was done by the goverment,,, to make sure or try to get everyone to save in a pension,
Just , Think it over first,, You put money into it,, tesco does, and you also get tax rebate as well,,, its the best way to save,,,Another thing is that when your turn comes to retire the state might just not be paying any pension,,, as it is you will have to wait till your 65 to get state pension, so dont rush and opt out,
Sammy listen to the good advice from mopat, you may be young and think that retirement is a long way off so you have lots of time, you may not be in a good position financially,but pensions are very very important To ensure you and yours are not going to be in difficulty in you retirement years. Company pensions are in the main the best way to save for your Pension, so please have a long think before you opt out.
Ditto. Done a lot of research- most sensible thing you can do is join the pension.
Hi I left tesco n 2010, I can't find any of my account information of it. I'm looking to transfer it to my current pension. Has anyone got a number I can contact them on please.
Thank you
Pensions helpline number is 08450701113. I was under the impression,that you could not transfer your Tesco pension into another fund,it was just frozen and payable on retirement. However ,this may not be the case. I hope this is the correct number,it was in March 2012.
If you have changed employment and have a frozen pension then most people have the right to transfer to another scheme.
The Pensions Advisory Service has a leaflet called 'Transferring your pension to another scheme'.
This would be a good starting point.
Thank you for that will have a look at my options.
You also have a right at retirement to amalgamate all accumulated pension funds into one fund to optimise income in retirement (fewer/lower charges, better rates for smokers etc)
hi does anyone know where i can download a blank expression of wish form, i could ask in store but not hopeful of getting one. any help would be great .
https://pensionwebsite.co.uk/mint-project/forms/expression-of-wish-form.php
Hi, can anyone help me with some advice. Have decided to take my pension now I won't be at Tosca when I reach the national retirement age also want too drop a day currently full timer 5 day week know sundays. can I pick the day to lose or do I have to comply with the business, want too drop Saturdays. thanks.
Pretty sure it will be down to 'needs of the business'.
2014 Colleague Handbook
QuoteColleagues with at least ten years' service and aged 55 or more will be eligible for the scheme. You may reduce your working week by one fifth with no reduction in pay for the six months' leading up to your retirement from the business.
You need to give your Personnel Manager at least 6 months' notice of your intention to retire in order to receive this benefit.
So true.
Quote from: fatty on 08-12-08, 11:57PM
The pension fund is now as im sure you are aware undergoing its three yearly review. I wonder how it is faring in this economic climate?
Well Apparently, and as of OCT this year,
On an accounting basis, the Group's net pension deficit after tax increased from £2.6bn
, as at22 February 2014,to £3.4bn. This movement is to a significant reduction of 40 basis points in real corporate bond yields, due to high demand and limited supply in the bond market.http://www.tescoplc.com/files/pdf/results/2014/interim/interim_2014-15_results_statement.pdf (http://www.tescoplc.com/files/pdf/results/2014/interim/interim_2014-15_results_statement.pdf)
This is very worrying considering the pension pot is estimated to be worth 11 billion. A 3.4 billion hole is more than just sizeable, particularly with the contraction of our market share both home and abroad. I believe this topic deserves its own thread and that questions need to be asked on many levels. So as to how 'it's faring in the economic climate? '. Not very well I would suggest :(
How concerned are you?
I got my benefits report this morning and my pension has been severely reduced over the last two years.
Here are my previous reports for what my pension could be worth;
2009 £13,325
2010 £13,647
2011 £14,712
2012 £19,084
2013 £13,697
2014 £12,009
I'm interested who else has been hit this hard recently.
Scummer, too detailed a post
Tesco faces new blow with £3bn hole in pensions. http://www.thesundaytimes.co.uk/sto/business/Retail_and_leisure/article1500530.ece (http://www.thesundaytimes.co.uk/sto/business/Retail_and_leisure/article1500530.ece)
QuoteSupermarket giant could be forced to pay an extra £300m a year to make up shortfall in retirement fund
Tesco's pension scheme has 350,000 members, of whom more than 200,000 are current employees (Getty)
EMBATTLED retail giant Tesco faces the threat of a new blow to its finances next year when it is likely to be forced to plug a multibillion-pound hole in its pension scheme.
The company will have to put as much as £300m of extra cash into the fund every year, analysis suggests, further denting its efforts to restore profitability.
The value of Tesco's pension fund and its projected liabilities are currently being assessed, and the result is due by next June at the latest. But the company's last annual report suggested that it had a deficit of almost £3.2bn: its assets were valued at £8.1bn, and liabilities were put at £11.3bn.
Trustees of the scheme — which has 350,000 members, of whom more than 200,000 are current employees — will have to negotiate with the company on plans for plugging the funding gap. The period for the extra payments is likely to be 10 to 15 years.
Pensions consultant John Ralfe said: "Tesco is likely to have to increase its pension contributions by £200m to £300m a year to deal with the deficit — just as it is facing huge pressures on its short-term operating profits and as the long-term viability of its underlying business model is being questioned."
Tesco is one of the few large companies that allow new recruits to join a "defined benefit" pension scheme with payouts linked to salary. Most big companies now offer new employees only "defined contribution" pension schemes where the size of the retirement benefit is not guaranteed.
Two years ago, the company changed the terms of its pension scheme, calculating payouts based on retirement at age 67 instead of 65 and changing the measure of inflation in calculating benefits.
However, Tesco is now likely to come under pressure from shareholders to close its final-salary pension scheme to new recruits.
"There doesn't seem to be evidence that having the scheme makes it any easier for Tesco to recruit people, so it seems hard to justify keeping it, given the other pressing priorities," said retail analyst Clive Black of Shore Capital.
Tesco insisted yesterday that when calculating the deficit, the trustees will not use the figure from the annual report.
Tesco's new boss Dave Lewis is grappling with an accounting scandal and a slide in sales. The pension time bomb will limit his scope for price cuts and investment to make Tesco more competitive.
Over the past year, Tesco's share price has fallen from 330p to 186p, one of the biggest drops in the FTSE 100.
The last full assessment of the pension fund's finances was completed in 2011. That showed a deficit of £934m. Tesco made an extra payment of £180m in 2013 to help fill the gap — but set aside only £3m last year. These payments were on top of its routine contributions.
The scheme's assets include property that is used by the group. On top of that, the pension fund has a claim over £416m of Tesco property: it is "held as security in favour of the scheme", according to the annual report.
Tesco said its pension scheme "has a diversified portfolio. It does not invest directly in Tesco shares."
The Tesco property assets "represent less than 2% of the scheme's assets". The pension scheme covers employees in Britain, Ireland, Thailand and South Korea. Most of the pension fund's £8.1bn of assets are invested in shares. More than £1bn is in hedge funds and what the company calls "alternative assets".
Nothing is safe.
Quote from: Loki on 28-12-14, 05:45PM
Nothing is safe.
Nope, and the Pension fund is floundering. Why has is trebled in three years? Why, despite a pledge to add 150 million per year since 2011 have they decided to set aside just 3 million last year? Consequently, they now have to add 300 million per year for the next 15 years with no assurances that they have the wherewithal to commit commit such an amount. The report doesn't tell you that the pension trustees have invested heavily in large stores that now look like white elephants. The day to day running of the pension scheme was recently brought in house but do you trust them to run it transparently given the company's revelations?
The Pension Fund had been investing in the company? That is what led Maxwell to taking a long run off a short deck.
How much has the company wasted when trying to breathe life into the large stores by adding coffee chains, Gyms, hairdressers and gawd knows what (the latest smoke and mirror illusion being that of Sports Dire erection and its share option rubbish). Desperate measures made by vagabonds in a bid to sweep the s**t under the carpet.
Amazing that this has happened after they changed the normal retirement date to 67 attained. I would not trust them to run a raffle, I believe this another Tesco story that aint going to end well. :( :(
What have the so called "trustees" been doing while this goes on?
Quote from: Joloda on 28-12-14, 08:22PM
What have the so called "trustees" been doing while this goes on?
Well, they are there to ensure that the scheme is run in a healthy and transparent manner. They exercise the right to ask any difficult questions to ensure that the integrity of the pension scheme is maintained in the interest of its contributors (us). The operational part of the term 'trustee' is probably 'trust'. Therefore, we may trust those in charge of the fund to be of the utmost personal integrity possible. If they observe shortcomings, or hear of any perceived mishandling they are obliged to address it immediately. I think we are at the stage where serious questions need to be asked as to why the hole has been allowed to grow at the same time as profits were allegedly overinflated? We need assurances that the hole will be plugged in the next 10/15 years even if it is at the expense of gross profits. Who are the the boardroom intent on saving? Is it us the pensioners of the future or the shareholders?
Quote from: Joloda on 28-12-14, 08:22PM
What have the so called "trustees" been doing while this goes on?
Oh and did I mention once again that the company merely set aside 3/4 million last year as a hole filler, instead of the 150 million that they had pledged to implement? So yeah, you're right. what are the trustees doing while this is allowed to happen? Shall we start naming the trustees on this site?
Yes, let's - list available here:
https://www.companiesintheuk.co.uk/directors/tesco-pension-trustees (https://www.companiesintheuk.co.uk/directors/tesco-pension-trustees)
Pension forecast via a friend of mine - If this person takes pension on 16th January rather than the 17th January they would be better off by £272.48 per annum and this is someone who worked for the company nearly 11 years. It is evidential that T**sco pension pots are reducing for those not taking early retirement and would this set a president that people should be considering early retirement rather than leaving it to fulfilment of the plan in and around of the age of 67 for those who are over 55 currently. Lets face it with the sink hole and the way t**sco going it begs the question of where they money has gone or is going...... >:(
Writing on the wall I think
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11326223/Tesco-could-close-pension-scheme.html (http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11326223/Tesco-could-close-pension-scheme.html)
QuoteDave Lewis, chief executive of Tesco, is considering closing the retailer's defined-benefit pension scheme to new members ...
Not really a surprise to be honest.
I cant get it till the end summer as I am not in 3 years yet. I was counting on it to be honest.
I hope Dave sets a late date for its closure .
It looks like I may be ok though. The Final Salary Pension Scheme is for pre 2007 staff only. Maybe he will leave the other care pension scheme alone as its not as big a payer as the other.
Sky News link http://news.sky.com/story/1403958/city-awaits-tesco-chiefs-turnaround-plan (http://news.sky.com/story/1403958/city-awaits-tesco-chiefs-turnaround-plan)
Sources confirmed that Mr Lewis will also announce plans to save hundreds of millions of pounds annually by cutting head office costs, which will trigger significant job cuts, as well as closing its final salary pension scheme.
Can anyone explain the effects of closing the defined benefits pension please?
Main guess ...... we lose out but how badly?
If not a stupid question ....will contributions to date still be paid as a defined benefit pension or will everything be moved to whatever is to follow it?
[admin]We ask that people don't bother quoting the post immediately above their own, thankyou,and you beat me to posting the same link by seconds :)[/admin]
This may help a little
http://www.thisismoney.co.uk/money/news/article-1535150/Final-salary-pensions-The-facts.html (http://www.thisismoney.co.uk/money/news/article-1535150/Final-salary-pensions-The-facts.html)
interesting articles thank you
>:D
I wonder what the effect of closing the Pension scheme will have to our pensioners?
None, only future pension offer is affected.
Quote from: Bug on 08-01-15, 01:45PM
None, only future pension offer is affected.
Thank you. This was my interpretation, but nice, very nice to have it confirmed.
But will it be frozen this yearie no pension increase
is their a two tier retirement age at Tesco
for example
60 for senior team, store managers, and above
67 for customer assistants and team leaders
No
Was thinking ???
As a Benefit In the company Pension, We get a death in service award, ok my wife will get it,
But if they close the Pension will that also mean that this will be another benefit we will lose :question:
Could be another hit we will be taking on to of all the others :(
They have not said any thing about it,
Quote from: troll-hunter on 08-01-15, 08:20AM
Can anyone explain the effects of closing the defined benefits pension please?
Main guess ...... we lose out but how badly?
If not a stupid question ....will contributions to date still be paid as a defined benefit pension or will everything be moved to whatever is to follow it?
Everything earned so far will be paid as defined benefit. Everything earned afterwards will be defined contribution, which transfers the risk factor of investment returns from the company to us the employee. And in a stagflationy inviroment such as nowadays, with negative real terms interest rates compaired to inflation, means it doesn't bode well for us.
I can only speculate that they will keep the life insurance part of the pension, but who really knows until they announce it, one way or the other.
Is pension builder (smart pb) defined benefit or defined contribution.
On many occasion i have heard long standing employees saying that the only reason they are still with the company are the benefits - namely the pension & share incentives. Neither are worrh staying for now?
Pension Builder is defined benefit.
Next question.
Once and after their ummmm, what was the word? oh yes, consultation, with USDAW and they close the defined benefits scheme (DB) will the portion of our pension that comes from the 'now' closed DB be fixed or will it vary?
It will not reduce and will increase at the rate already in place. The only change is that you will not be able to accrue any more benefits. If you have 15 years contributions then your benefit will be fixed at that level and any subsequent contributions will be into the new Defined Contribution scheme and any subsequent benefits will come from that fund.
The-vortex, not to confuse people but the pension changed in 2012 also if we went along with the new one which i am not ,wouldn't there be three different tiers in our pension.
Yes. Or rather, two versions of the DB/FS scheme and the new DC scheme.
by the way you say "... if we went along with the new one which I am not...", don't decline something that you know nothing about. If, having checked the new scheme out, you then decide to opt out then OK but don't make a decision yet. Remember that T*sco are obliged to make contributions to a workplace pension and in the case of this new scheme the fund being credited will be your own specific fund not a group fund, which means you will be able to see what they are putting in for you.
I have worked as a ga for this company for 25 years.
3 months ago I dropped 1 day going from full to part time. I knew this would affect my final salary pension, but with 12 years still to work I decided that it was worth it.
I don't understand pensions, but am I right in thinking that because the pension has now been scrapped and will now be paid out at today's salary for the sake of 3 months, rather than being obsored over 12 years, I have lost a lot of money.
If only I had had an inkling this was going to happen I would not have dropped a day yet.
T/l, pay freeze maybe, yes I expected, but always thought our pensions as safe, gutted.
The-vortex, thanks for the advice much appreciated,
Denzil I too dropped a day three months ago but I also took my pension as well , the amount in your benefit report that state's how much you have earned up to now is your pension when you retire at state pension age when I took mine it went down by 300 a year less my 25% cash free lump sum.I did it because I want to have more time away from tosco also can look for another job, but if still at tosco next year will just join the new scheme.
Could someone give any information about being retired due to Ill health. I'm not going to get any better and will constantly need time off. Been with company nearly 7 years. Many thanks
You can be retired on ill health grounds and receive a partial pension, ie. what company pension you have accrued so far. There is also retirement on a full pension ie. the pension you would have received if you had stayed with the company till retirement age, to receive this however you will require medical evidence/opinion that due to your medical condition you will never be able to find any type of gainful employment.
Details of ill health pension specific to you in your benefits book. More info =rep or personnel.
@Denzil and @redders, the (still) current DB pension accrues annually. Each year that you contribute gains you an annual pension income of 1.25% of that year's pay (not salary or basic but actual received pay including overtime). This technically makes it an Average Income scheme rather than a Final Salary scheme. Most DB schemes have, historically, based your pension benefit as an accrued percentage of your salary in your final year which benefits employees of businesses and government departments who get regular service related pay rises and makes their final year much better paid under normal circumstances. Their benefit is usually restricted to contracted salary only and ignores overtime and quite often any regional pay allowances as well.
So don't worry about losing any pension benefit from previous years.
Thanks for that Vortex, didn't understand any of it apart from the last line but it certainly puts my mind at rest.
Thank you.
Tesco will never be able to make up the pension deficit .As with my previous employers scheme which had the same deficit it will eventually pass into the PPF which is the pension protection fund.This will guarantee your pension but you will only receive 90% of it,however,you will be able to take a larger tax free lump sum from it.
Quote from: jojo on 18-01-15, 01:21PM
Tesco will never be able to make up the pension deficit .As with my previous employers scheme which had the same deficit it will eventually pass into the PPF which is the pension protection fund.This will guarantee your pension but you will only receive 90% of it,however,you will be able to take a larger tax free lump sum from it.
I think I might be right in that tesco have to compensate the perceived loss of benefit from the size of the accrued pot saved to the contributor .
So, in theory everyone still in the final salary pension could expect an offer pro-rata in £ as ex gratiia to stop the fund.in practice this is usually offered to make as first payment into a new pension arrangement , but could be taken as extra pay but subject to tax and n.i.
You never know , if you've got loads of service and a huge pot , ........
http://www.theguardian.com/business/2015/feb/02/john-lewis-ditches-final-salary-pension-staff-contribution-scheme (http://www.theguardian.com/business/2015/feb/02/john-lewis-ditches-final-salary-pension-staff-contribution-scheme)
Hi all, with the exception of the Public Sector, so called 'unfunded' Pension's (ie. There is no 'pot' of money, all that is paid out comes out of general taxation) Defined Benefit Pensions have become unaffordable. That said about Defined Benefit Pensions, even the Public Sector have started to reform and incease personal contributions. What I feel is a hope is that with Tesco's collective bargaining power ie. over 300,000 UK staff, the 'New' Tesco Pension will offer a significantly better deal then you are likely to get Privately or from most other Companies, hopefully.
Quote from: spikymagik on 04-02-15, 09:01AM
http://www.theguardian.com/business/2015/feb/02/john-lewis-ditches-final-salary-pension-staff-contribution-scheme (http://www.theguardian.com/business/2015/feb/02/john-lewis-ditches-final-salary-pension-staff-contribution-scheme)
Reading the article carefully and some others out on the interweb), you'll notice that John Lewis will still offer a defined benefit final salary pension, but a smaller one alongside a defined contribution cash balance pension which requires employee contributions with company matching. Headline does not match the article.