Supermarket giant Tesco has told its staff it will end its final salary pension scheme following a 90-day consultation with workers and unions.
The retailer will shut the scheme but has made concessions for a new scheme that will take its place, which comes into force in October, following discussions with staff members.
The changes mean staff will now be able to pay up to 7.5% of wages into their pension pot, which will be matched by the grocer. That outstrips the previously set maximum rate of 5%.
Tesco will also increase the amount of life cover it offers employees from four times to five times their salaries.
Around 27,000 calls were made to the retailer’s pension helpline and 3,000 comments were made by staff during the three-month consultation, which ended in August.
Chief executive Dave Lewis, who marks a year in charge of the supermarket giant today, has been eager to shore up the grocer’s balance sheet and made it a priority to plug a £3.9bn black hole in Tesco’s £8.4bn pension fund.
A spokeswoman for Tesco said: “While we have taken the difficult decision to close our existing scheme, we have acted on this feedback and significantly improved the original proposal.”