mast image

Special Report

Impact investing


M&S makes £95m from pension cuts

UK - British retail group Marks & Spencer (M&S) has reported a £95m (€136.5m) exceptional pension credit in its interim results, as pension scheme members consent to slow down benefit increases.

From the beginning of last October, pensionable salaries of members in the £4.5bn defined benefit plan will now only increase in line with inflation.

This move created a £95m in past service credit for the company, reflecting the impact of adjusting their projected final pensionable salaries.

"Members have chosen the option to limit their future pensionable salary increases to inflation," M&S said in its half-year report for the 26 weeks to end-September 2007.

Other options would have been to introduce member contribution to the scheme or to slow down pension benefit build up.

This was part of a deal struck in March as an alternative to closing the final salary scheme to future accrual or increasing the retirement age.

"These measures made our final salary pension scheme more secure for the future and reduced the risk of the deficit growing again," a spokeswoman for M&S told IPE.

She added: "Under all options, members' current pension value was untouched. The changes only affected the way members' pensions built up in the future."
Part of the changes to the pension arrangement included a £1.1bn sale and leaseback deal for some of its property holdings - £500m of which was put into the pension fund. [see earlier IPE article: M&S property plug cuts deficit to £283m]

At the end of September, the pension fund was £127.4m in surplus compared to a £1.05bn deficit the year before.

If you have any comments you would like to add to this or any other story, contact Barbara Ottawa on +44 (0)20 7261 4618 or email

Have your say

You must sign in to make a comment


Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2540

    Asset class: All/Large Cap Equities.
    Asset region: UK.
    Size: The fund will be added to our guided fund range.
    Closing date: 2019-05-27.

  • QN-2541

    Asset class: Small/Mid-Cap Equities.
    Asset region: Switzerland.
    Size: CHF 130m.
    Closing date: 2019-06-04.

  • QN-2542

    Asset class: All/Large Cap Equities.
    Asset region: Switzerland.
    Size: CHF 130m.
    Closing date: 2019-06-04.

Begin Your Search Here