Marks and Spencer’s defined benefit pension scheme remained in surplus over the year dropping by £33.9m to £914.3m at 30 March 2019 on an IAS 19 basis.

The surplus has decreased from £948.2m from the end of March 2018. It attributed the decrease in the surplus to a decrease in the discount rate, partially offset by a change in mortality assumptions and by the return on scheme assets.

The IAS 19 surplus includes the first partnership interest in the scheme assets, valued at £278.5m.

Marks and Spencer also revealed that in April 2019, the UK DB pension scheme purchased additional pensioner buy-in policies with two insurers for approximately £1.4bn.

Together with the two policies purchased in March 2018, the DB pension scheme has now, in total, hedged its longevity exposure for around two thirds of the pensioner cash flow liabilities for pensions in payment. The buy-in policies cover specific pensioner liabilities and pass all risks to an insurer in exchange for a fixed premium payment.

It also noted the results of the scheme’s most recent triennial valuation, as first highlighted in its interim results. An agreement was reached with the trustee of the UK DB pension scheme for the valuation as at 31 March 2018.

The triennial valuation found a statutory surplus of £652m, which is an improvement on the previous position at 31 March 2015 (£204m). It said this was primarily due to lower assumed life expectancy.

The company said it has confirmed, along with the trustee, that no further contribitions will be required to fund past service as a result of the triennial valuation. However, this does not include those already contractually committed under the existing Marks and Spencer Scottish Limited Partnership arrangements.

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