Marks & Spencer outlines pension funding plan

Contributions from the retailer include £35m of cash contributions per year for the first three years of the plan, increasing to £60m until 2018.

A further £300m of value will come through a property-backed partnership that M&S established with the Pension Scheme in 2007.

£124m will come from the transfer of assets from US$ debt hedge contracts held by the company.

The announcement of the plans came after the latest valuation of the M&S pension scheme showed a deficit of £1.3bn at March 31 last year.

M&S said in a statement today that the £500m difference between the valuation deficit and the funding plan “is expected to be met by investment returns on the pension scheme’s existing assets”.

M&S group finance and operations director Ian Dyson 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.”