Tesco PLC, Cheshunt, England, will offer a new defined contribution plan beginning in November, once the supermarket freezes its £8.4 billion ($13.2 billion) pension fund, a company spokeswoman said.
The company announced the new plan, which will include a 7.5% employer match for contributions, up from 5% in the previous DC plan, as well as an extra, one-time contribution.
The announcement comes after a 90-day consultation “with everybody that works with us, and that is about recognizing and keeping up to this point what people have accrued in terms of DB, and then going forward offering a competitive (defined contribution) scheme for Tesco colleagues within the U.K.,” David Lewis, CEO, said in an April presentation.
“Thousands of colleagues engaged in our pension consultation, and we've listened carefully to feedback from them and their unions as part of our decision-making process,” the company said in a statement Tuesday. “Whilst we've taken the difficult decision to close our existing scheme, we've acted on this feedback and significantly improved the original proposal. We're committed to providing a competitive pension scheme that's sustainable for the business and rewards our 300,000 colleagues for the great job they do.”
The company spokeswoman would not provide further information.