Business

M&S plans pension fund bail-out

Marks and Spencer store, London
Image caption M&S's final salary pension scheme is heavily in the red

Marks and Spencer has announced plans to pump a total of £800m into its final salary pension scheme in an attempt to fill its growing funding gap.

The plan includes M&S making cash contributions to the scheme totalling about £376m over the next eight years, as well as other investments.

The scheme, which has more than 120,000 members, reported a deficit of £1.3bn in March this year.

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 will 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.

In addition, £124m will be made available by freeing up money currently invested in US dollar hedging contracts.

Related Internet links

The BBC is not responsible for the content of external Internet sites