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- Liva & Laia : 15th November
Retailer Marks & Spencer has announced an 800-million-pounds funding plan for its final salary pension scheme after a triennial review showed the scheme was deeply in the red.
The clothing, food and homewares group said on Wednesday the scheme, which has about 123,000 members, had a deficit of 1.3 billion pounds at March 31, 2009, albeit at a time when equity markets were at a particularly low ebb.
Marks & Spencer (M&S) said it had agreed the new funding plan with trustees of the scheme.
It includes the firm making a cash contribution of 35 million pounds a year for the first three years of the plan, rising to 60 million a year until 2018. M&S said this had a present day cash value of 376 million pounds.
M&S will also grant the pension scheme a further interest in the property-backed partnership established between M&S and the scheme in 2007, worth about 300 million pounds.
An additional 124 million pounds will be provided by transferring assets from existing U.S. debt hedge contracts held by M&S, the firm said.
"We've agreed a comprehensive funding plan with the Pension Scheme Trustees, which makes efficient use of our existing assets, providing the scheme with a substantial income to reduce the deficit, while ensuring our cash flow obligations are spread over a manageable timeframe" finance director Ian Dyson said.