Tesco, the country's largest private sector employer, wants to raise the retirement age of its staff from 65 to 67 and cut their pensions by around 15 per cent. This will not go down well with the firm's 172,000 workers. But it is a sign of the times, and where Tesco leads, others are likely to follow.

When the company began its scheme in 1973, life expectancy for a Tesco employee was 77; today, it is 90, and the existing system is not sustainable. Yet it will remain one of the most generous schemes in the country. It will continue to offer all staff a defined benefit package. Cuts will not be applied to pensions already accrued. If pensions will rise in line with a lower index than before, that is the same deal that the Government is imposing on the public sector.

But with Tesco having issued its first profit warning in 20 years, and with a £275m deficit in the fund, staff must face economic reality. Older staff will have to work a few more months, and younger staff two more years to receive a full pension. Nor will Tesco be the last company whose workers will have to adjust their expectations.