Changes made Tesco Pension Scheme 2012

[Loki]

Here is the official letter that Usdaw distributed to it's Reps regarding the changes to the Tesco Pension Scheme:

To the Tesco Rep

Dear Colleague

Tesco Pension Scheme.

In March 2012 Tesco announced some proposed changes to the pension scheme to ensure the scheme remained sustainable for the future. Following detailed discussions and after receiving feedback from Usdaw members and representatives Usdaw's position is as follows.

Usdaw's Position

Usdaw welcomes the decision by Tesco to keep the defined benefit scheme open to both new and existing members and supports the decision not to increase members' contributions to the scheme at this time.

The proposed changes are:

* Switch from RPI to CPI for the revaluation and indexation of future accruals and
* The introduction of Life Expectancy Adjustment Factor (LEAF)

Usdaw took independent actuarial advice with regards to the proposed changes. Our advisors are satisfied that the data sets being used for Life Expectancy Adjustments Factor (LEAF) are appropriate for the purpose.

We recognise that these changes could result in smaller pensions going forward and may require members to work to a later age to realise their full unreduced pension. However both Usdaw and the independent advisors are of the view that the proposed changes to the scheme are the options that will have the least impact on the existing members of the pension scheme.

Usdaw put forward proposals on behalf of our members concerning future adjustments made to LEAF. This is to allow Usdaw's Pensions Officer to seek independent actuarial advice to satisfy ourselves that any adjustment is justified and appropriate and allows the National Officers to notify their respective National Forums.

Secondly, we want scheme members to be afforded a reasonable level of protection from future adjustments to LEAF being applied to their benefits when they are approaching retirement. This will protect members from any reduction to their pensions when they are approaching retirement.

Accordingly Tesco have made some changes to the scheme following these proposals.

We know how valuable a defined benefit promise is to our members because it allows them to plan their retirement knowing how much pension they can expect to receive. Usdaw's view is that even with these changes to the scheme the Tesco pension scheme remains the best way for Usdaw/SATA members to save for their retirement and continues to be one of the best pension schemes available in the UK.

On that basis Usdaw accept that the proposed changes are necessary to ensure the pension scheme remains affordable and sustainable for all existing and future employees.

Yours sincerely

PAULINE FOULKES                                        JOANNE McGUINNESS
National Officer                                                 National Officer