Tesco Pension Scheme

Tesco PLC
19 February 2003

                     TESCO BOOSTS FUNDING OF PENSION SCHEME




Tesco today said that it is to increase the amount the company pays into its
Final Salary pension scheme. This is alongside a smaller increase in staff
contribution, following the three-year actuarial valuation. Tesco will pay more
than two thirds of the extra cost required, more than double the employee
contribution.


The result of our three-year actuarial valuation is a deficit of £159m. We are
91% funded, compared to 96% in 1999.


Tesco said:

'We have always taken a proactive and responsible approach to managing pension
schemes. This early move will ensure that future benefits are safeguarded and
that the best interests of staff and shareholders are met.


Our pensions schemes are amongst the best in the industry. We recognise that
Pensions play a vital part in the rewards package and is part of the reason that
people like to work for Tesco'.




Notes for Editors:


 1. Tesco has two schemes the final salary scheme, and the Pension Builder
    scheme, which covers the majority of Tesco staff and is not affected by this
    change.


 2. Tesco has a large but immature pension scheme. The Final Salary scheme has
    40,000 members and the Pension builder scheme has 80,000 members. There are
    only 10,000 pensioners in the scheme.


 3. Two years ago we announced our ground breaking Pension Builder career average
    scheme, a defined benefits scheme which bucks the trend towards less secure
    money purchase schemes. Pension Builder now has 80,000 members, providing
    them with a flexible and transparent investment for the future.


 4. Pension Builder provides defined benefits to full-time, part-time and
    temporary employees. The scheme takes into account overtime and is
    particularly suitable for retail staff who work varying hours.


 5. In addition to good Pensions, our staff enjoy the best benefits package in
    the industry including:


  • One of the best pay rates in the sector

  • £38 million profit share paid out in 2002

  • £68 million payout from Save As You Earn schemes in 2003

  • A Buy As You Earn scheme offering staff the chance to buy tax free shares
    from their gross pay;

  • Staff discount

  • Access to a range of voluntary benefits including healthcare, financial
    advice, and leisure deals.




Enquiries:
Investor Relations             Lucy Cross                          01992 646663
Press                          Karen Marshall                      01992 644645
The Maitland Consultancy       Angus Maitland                      020 7379 5151


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