Tesco imposes two year increase in pension age

As public sector workers fight to defend their pensions by inspiringly taking strike action, one particular private sector employer has managed to waive through pension changes without so much as a whimper from the shopworkers’ union Usdaw.

Tesco’s recent pension changes mean that more than 170,000 staff will have to work up to two years longer to qualify for their full pension and new staff who are yet to join the pension scheme can justly ask: ‘Is the pension scheme really worth it?’ Tesco, who are the UK’s biggest private sector employer, also plans to save money by increasing staff pensions in line with the consumer price index (CPI) instead of the retail price index (RPI) – a move which only affects future service but which will nevertheless leave some workers thousands of pounds worse off during their retirement.

Tesco boasts that it was one of only four FTSE 100 companies that still has a defined benefit arrangement in place. But this argument is as hollow as arguments about public sector pensions being better than private schemes and simply constitutes a race to the bottom.

The supermarket chain is proposing to increase by two years – from 65 to up to 67 – the age at which a full pension is paid. This affects pension built up after 1 June 2012. Tesco has said this does not mean staff will have to retire up to two years later – the normal retirement age remains 65, and staff can still apply to retire any time after 55, but in reality few Tesco workers, on relatively low-paid wages, will be able to retire ‘early’.

Most insultingly of all, one of the reasons given for the pension changes, is the rise of the average life expectancy to 80 plus. I doubt that life expectancy in the poorer communities in which most Tesco workers live is this high. Most Tesco staff can now only look forward to a few years of retirement with less to provide for themselves.

False promises

As if this wasn’t a big enough blow for any new staff in Tesco then a recent development over wages takes the biscuit. A spate of new stores opened in 2011, particularly in South Wales. New starters at these stores started on a basic £6.65 hourly rate and were told on numerous occasions that this would rise to £7.00 per hour after six months.

When the six month anniversary hit though, the wage rise didn’t occur and staff were told it would not occur until a year’s service! The pathetic reason given was that no new stores opened between 2007 (when the change from six months to a year occured) and 2011 and thus the new stores weren’t aware of the change and told new starters false information.

This bombshell for new starters is being challenged and fought at a local level in conjunction with the union, Usdaw. However this issue and the pension one shows the dire need of a more militant Usdaw leadership which is prepared to fight for its members and stop Tesco walking all over us.

The will to fight is there in the workforce with members regularly professing a desire to strike, we just wish we could be out there with the public sector workers, fighting for better pensions too.

A Tesco worker

This version of this article was first posted on the Socialist Party website on 11 May 2012 and may vary slightly from the version subsequently printed in The Socialist.