Amid all the turmoil of senior management changes at Marks & Spencer there continues a steady approach to supporting the Defined Benefit [Final salary in old money] pension scheme deficit.
M&S has agreed with the scheme to pre-fund £200m of contributions over the next 3 years. The company will do this by further leveraging the property-backed partnership it has with the scheme aimed at tackling the deficit.
On what is effectively a lease-back arrangement, M&S will put £400m [market value] of property  into the partnership to increase annual distribution of partnership profits to the scheme by £22m. This means the £200m of contributions are effectively financed at around 6.1%.
The partnership is consolidated in M&S Group’s accounts so there is no impact on net assets and control of the property is retained by M&S.
Who needs actuaries when it’s all that simple?
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