The Tesco Pension Trustee has selected Schroders Solutions, part of Schroders group, to manage the investments of the closed Tesco defined benefit (DB) pension scheme through an outsourced chief investment officer (OCIO) contract.

The scheme’s investments are currently managed by Tesco Pension Investment (TPI) which was set up in 2011 and it has successfully implemented the scheme’s investment strategy and saw the fund reach a fully funded position.

Last year, the scheme implemented a new phase of its investment strategy and further reduced its investment risk.

On the completion of the last actuarial valuation, and following a careful review of the long-term needs of the scheme, the trustees decided to outsource its investment management to Schroders to build on the achievements of TPI.

The transfer of its investment portfolio management to Schroders will be completed before the end of 2024, the scheme said.

IPE understands there will be a small number of colleagues working for TPI that will transfer over to Schroders. However, it is not the full team and there will be an impact for colleagues working at Tesco Pension Investment.

“We’re working with them very closely to help find alternative roles and currently have hundreds of vacancies across our office,” a Tesco pokesperson told IPE.

Ruston Smith, chair of Tesco Pension Trustee, said: “On completion of a comprehensive strategic review of the scheme’s long-term needs, the trustee has agreed to appoint Schroders as its outsourced principal investment manager.”

Smith said that working on the achievements of TPI, Schroders will deliver security for scheme members.

He added: “The team at TPI have done an excellent job of managing the assets for more than a decade and have contributed to the scheme being fully funded on the trustee’s funding basis.”

James Barham, executive chair of Schroders Solutions, added: “We are really pleased to have the opportunity to partner with Tesco and grateful for the trust the trustee has placed in us under the scheme’s new outsourced chief investment officer approach.”

He added that Schroders’ services to the scheme will be delivered through a fully tailored OCIO service.

Read the digital edition of IPE’s latest magazine