Marks and Spencer 2007 Annual Report Download - page 69

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1111 RREETTIIRREEMMEENNTT BBEENNEEFFIITTSS
The Group provides pension arrangements for the benefit of its UK employees through the Marks & Spencer UK Pension Scheme.
This has a defined benefit section, which was closed to new entrants with effect from 1 April 2002, and a defined contribution
section which has been open to new members with effect from 1 April 2003. Further details of the Pension Scheme can be found
on page 30.
The defined benefit section operates on a final salary basis and at the year end had some 27,000 active members (last year 31,000),
57,000 deferred members (last year 57,000) and 37,000 pensioners (last year 38,000). At the year end, the defined contribution
section had some 7,000 active members (last year 5,000) and some 1,000 deferred members (last year nil).
The Group also operates a small funded defined benefit pension scheme in the Republic of Ireland. Retirement benefits also include
a UK post-retirement healthcare scheme and unfunded pension plans.
Within the total Group retirement benefit cost of £91.1m (last year £80.7m), £78.0m (last year £69.1m) relates to the UK defined
benefit section, £7.6m (last year £5.6m) to the UK defined contribution section and £5.5m (last year £6.0m) to other retirement
benefit schemes.
A
APPeennssiioonnss aanndd ootthheerr ppoosstt--rreettiirreemmeenntt lliiaabbiilliittiieess2
20000772006
££mm£m
Total market value of assets 5
5,,222277..554,606.2
Present value of scheme liabilities (
(55,,448877..00))(5,381.3)
Funded pension plan deficit (
(225599..55))(775.1)
Unfunded pension plans (
(11..22))(1.7)
Post-retirement healthcare (
(2222..66))(18.1)
RReettiirreemmeenntt bbeenneeffiitt ddeeffiicciitt((228833..33))(794.9)
B
BFFiinnaanncciiaall aassssuummppttiioonnss
A full actuarial valuation of the UK defined benefit Pension Scheme was carried out at 31 March 2006 and showed a deficit of
£704.0m. The financial assumptions for the UK scheme and the most recent actuarial valuations of the other post-retirement
schemes have been updated by independent qualified actuaries to take account of the requirements of IAS 19 – ‘Retirement
Benefits’ in order to assess the liabilities of the schemes:
2
20000772006
%%%
Rate of increase in salaries 3
3..773.7
Rate of increase in pensions in payment for service
– pre April 1997 22..662.4
– between April 1997 and July 2005 3
3..002.9
– post July 2005 2
2..332.1
Discount rate 5
5..334.9
Inflation rate 3
3..002.9
Long-term healthcare cost increases 8
8..007.9
The amount of the deficit varies if the main financial assumptions change, particularly the discount rate. If the discount rate
increased/decreased by 0.1% the IAS 19 deficit would decrease/increase by c.£100m.
wwwwww..mmaarrkkssaannddssppeenncceerr..ccoomm//aannnnuuaallrreeppoorrtt22000077MARKS AND SPENCER GROUP PLC 6677
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