Tesco has reported a net pension deficit of £2.4 billion, a rise from the £1.8 billion deficit reported at the last year end on 30 March 2013.
The retailer’s Interim results 2013/14 reported that this was due mainly to the reduction in real corporate bond yields leading to a fall of 0.3% in the discount rate for measuring liabilities. It also explained that it was partly offset by higher than expected asset returns over the period.
As part of Tesco’s 2011 triennial valuation, the organisation agreed with the trustees of its defined benefit (DB) pension scheme to make an additional contribution of £180 million to the scheme on 30 March 2012.
Also in March 2012, Tesco announced it would switch to the consumer prices index (CPI) to calculate its DB pension contribution rises, and increase the age at which a full pension is pad by two years.