M&S plans pension fund bail-out
Marks and Spencer has announced plans to inject £800m into its final salary pension scheme in an attempt to fill its growing funding gap.
The idea is that M&S will be making cash contributions to the scheme totalling about £376m over the next eight years, as well as other investments.
The pension scheme, which has more than 120,000 members, reported a deficit of £1.3bn in March 2010.
It is hoped that rising equity markets will fund the rest of this deficit.
“We’ve agreed a comprehensive funding plan with the pension scheme trustees, which makes efficient use of our existing assets,” said Ian Dyson, M&S’s outgoing director of finance.
He said the plan would provide the pension fund with an income to close its deficit over a “manageable time-frame”.
M&S intend to make payments of £35m a year for three years, followed by £60m a year until 2018.
A further £300m will be provided through giving the pension scheme a bigger share in a current property-backed investment partnership.
To add to this, £124m will be made available by freeing up money currently invested in US dollar hedging contracts.
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Source : BBC News
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