M&S pours £400m into pensions

HIGH Street stores group Marks & Spencer is raising £400m through a bond issue to help plug a £585m gap in its final-salary pension scheme, which has just over 131,000 members.

M&S closed its final-salary scheme to new members last April but finance director Alison Reed said today the group is committed to ensuring it is adequately funded.

She said: 'By taking this action we are providing reassurance to the scheme members. We believe this is an opportune time to raise the funds, taking into account current interest rates and demand in the corporate bond markets.'

The market value of the assets of the scheme is £2.61bn, against liabilities of £3.2bn. That represents a funding level of 82%, rising to 94% after the £400m injection.

The group is also adopting new accounting standards - FRS17 - which will have the effect of cutting pension costs in the current year by £30m, adding about 1.3p to earnings per share.

M&S today declined to comment on reports that it plans to poach a senior Next executive to head its struggling clothing operations. Reports suggest that Christos Constantinides, product manager at Next, is being lined up to replace former M&S clothing chief David Norgrove.

An M&S spokeswoman said the search for a replacement is continuing. Those thought to have already turned down the high-profile job are former Debenhams boss Belinda Earl, New Look chief executive Stephen Sunnucks and Pringle's Kim Winser.