UK - Marks & Spencer said that it would sell bonds worth £400m after an actuarial valuation revealed a £585m shortfall in its pension scheme.
The capital injection which is expected to boost funding levels to 94% from 82%, will to take place by the end of March 2004. “The injection will be funded, subject to market conditions, through a public bond issue. The issue will be made under the group's medium term note programme,” the company said in a statement.
Alison Reed (pictured), group finance director, Marks & Spencer, said: Marks & Spencer is committed to ensuring the defined benefit pension scheme is adequately funded. By taking this action we are providing reassurance to the scheme members.
We believe that this is an opportune time to raise the funds, taking into account current interest rates and demand in the corporate bond markets.
The company is also adopting accounting standard FRS17 for the year ending April 3, 2004.
The profit and loss account pre tax charge under FRS17 for the UK Scheme for this financial year is estimated to be £134m (last financial year £136m, as reported under SSAP24).
As a consequence of adopting FRS17, the previously reported FRS17 deficit of £1.2bn at March 29, 2003 will be reflected on the group's balance sheet by means of a prior year adjustment.
At the end of January 2004, the deficit had decreased to approximately £1bn before tax.
A suite of liability driven investment (LDI) indices has been launched by STOXX and RiskFirst to aid trustees and consultants select, monitor and challenge managers.
British Airways and the trustees of one of its pension schemes are set to argue over the purpose of a pension scheme, leading to an impactful judgment for DB pensions. James Phillips explores the issue
Bank of England governor Mark Carney has said there is still a lot of data to consider before the Monetary Policy Committee (MPC) can decide when to next hike interest rates.
Savers are not squandering their tax-free lump sums under Freedom and Choice but are taking a more cautious approach to retirement, according to Prudential research.