Supermarket group Tesco will increase contributions to its final salary pension scheme after a review showed it had a £159 million sterling (€237 million) deficit.

The group said it would make up the deficit over 10 years, beginning with an extra contribution of £15-£20 million in the next financial year.

It added that the 40,000 members of the scheme would also have to increase the amount they paid in by 0.75 per cent of their salary, making up one-third of the extra contributions.

However, a spokesman for Tesco Ireland said its employees were covered by their own pension scheme and the announcement in Britain was entirely separate and would not affect their pension arrangements.

Tesco blamed adverse market conditions for the deficit, which showed up in its three-year actuarial valuation of the scheme. The examination found it was only 91 per cent funded.

A spokesman said: "We have always taken a proactive and responsible approach to managing pension schemes. This early move will ensure that future benefits are safeguarded."

Two years ago the group announced it was closing its final salary scheme to new members and replacing it with a career average one.

Under the new Pension Builder Scheme, which has 80,000 members, staff's income during retirement is still guaranteed but is based on their average earnings during their career, rather than final salary.