Tesco pension fund drops by £9bn after ‘safe’ investments backfire

The value of Tesco’s pension fund has plummeted by £9 billion after a series of bets on supposedly ‘safe’ investments have fallen through.

The scheme from the UK’s largest retailer, which looks after 340,000 UK pension members, was put at risk because of exposure to Liability Driven Investments (LDIs), This is Money reported.

LDIs were designed to match the assets of a pension plan, such as gilts, with its liabilities, like the promise to pay future retirement benefits.

However, LDIs ran into difficulty last year when interest rates rose sharply, causing the price of gilts to plummet and leaving pension funds with huge losses.

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Last year, Tesco’s assets saw a 42% drop to £13 billion, in one of the largest pension value drops that the industry saw last autumn.

Despite the shortfall, Tesco has no plans to pay more into its pension plan, which was closed to new members in 2015.

A spokesman for Tesco said the pension scheme was “in a strong position”, “well-funded” and “in surplus” under a different measure used for calculating contributions.



5 Comments. Leave new

  • Leslie Clive Bedford
    May 15, 2023 9:54 am

    As long Tesco continue to pay my pension.I’m not bothered ,worried or concerned .I’m more bothered,worried and concerned if Tesco do away with my combined colleague discount card and Clubcard.

  • Jeremiah Higginbittom
    May 22, 2023 1:38 pm

    Leslie, I don’t know your circumstances but I can guarantee that, while your Clubcard and Discount Card might save you a few quid, a substantial drop in the value of the pension fund could potentially cost you thousands.

  • Joanna Thiele
    June 14, 2023 8:33 am

    I was medically retired and have been trying to access my pension at tesco for over 3 months with no success. It makes sense now why I haven’t been successful after finding out Tesco had made unwise investments that have resulted in a massive financial loss. £9 bn is a huge amount of money. What can I do?

  • I’ve lost over £130,000 in value in 24 months, I only found out when looking at transferring to another provider?


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