Marks & Spencer reduces pension deficit and annual contributions

Clothes retailers Marks & Spencer Group saw its shares rise almost two and half per cent on Wednesday after announcing that it has reduced its pension deficit and significantly lower annual cash contributions.

The news prompted a revival of recent takeover talks.

The value of the pension scheme has resulted in a deficit of £290m, markedly lower than the £1.3bn as at March 31st 2009.

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Together with its trustees, the company has agreed a 10-year funding plan which includes annual cash contributions of £28m per annum from 2013/14 to 2016/17, a reduction on the previously agreed £60m per annum until 2017/18.

The group said the remaining balance is expected to be met by investment returns on the scheme's existing assets.

In a statement the company said: "The improvement reflects the additional contributions made to the Pension Scheme following the 2009 valuation together with strong investment growth and sound risk management."

Shares rose 2.38% to 387.70p by 13:45.

NR