SHARES in Marks and Spencer were given a boost yesterday after the retailer announced yesterday it had agreed on a cheaper funding plan after slashing its pension deficit by nearly 80 per cent since 2009.
The group said the latest actuarial valuation of its UK defined benefit pension scheme, which takes place every three years, showed a deficit of £290m at March 2012 compared with £1.3bn at the same period in 2009.
M&S said the improvement reflected “additional contributions” together with “strong investment growth and sound risk management”.
As a result the company has drawn up a new 10-year funding plan and will pay cash contributions of £28m per year over the next three years, less than the £60m previously agreed until 2018.
The remaining amount will be funded from returns on existing assets as well as investment returns on its property portfolio.
Shares rose three per cent in early morning trading before closing up 2.17 per cent at 387p.
Jean Roche, analyst at Panmure Gordon said “there is a sense of relief in terms of this unexpected good news announcement” after a lacklustre performance in it share price over the past few weeks.