Marks and Spencer 2013 Annual Report Download - page 73

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Governance Marks and Spencer Group plc Annual report and financial statements 2013 71
Overview Strategic review Financial review Governance Financial statements and other information
Pensions governance
The Group operates a defined benefit pension scheme (the
‘Scheme’) for employees with an appointment date prior to
1 April 2002.
The results of the triennial actuarial valuation of the Scheme as
at 31 March 2012 revealed a deficit of £290m. This represents a
substantial reduction in deficit from £1.3bn as at 31 March 2009.
The assets of the pension scheme, which are held under trust
separately from those of the Group, are managed by the Board
of the Pension Trust (‘Trustee Board’). The Trustee Board has
three main committees: Management and Governance,
Investment and Actuarial Valuation.
During the year the size of the Trustee Board reduced from
12 to nine members. The Trustee Board is chaired by Graham
Oakley, who commenced a five-year term in April 2011, having
been a member of the Board since 2000. The Trustee Board
includes two independent directors plus three member
representatives who are appointed through a selection process
which embeds efficient succession rotation planning. During
the year the Board has been recognised through various
external awards including those for investment strategy and
risk management.
The Trustee Board has a business plan against which progress
is measured on an ongoing basis in a similar approach to the
Group Board. The Trustee Board also maintains a risk register
and an associated action plan, a conflicts of interest policy,
plus a register and a code of ethics, all of which are reviewed
regularly.
Each Trustee Board Director has an individual training plan,
which is based on the Pension Regulator’s Trustee Knowledge
and Understanding requirements and tailored to address any
skill gaps and specific committee roles. The majority of the
Trustee Board members hold the Pensions Management
Institute Award in Trusteeship.
All advisers, investment managers and suppliers are appointed
through a rigorous tender process. They are monitored via
quarterly reports and periodic meetings and there is also a
rolling programme of both informal and formal adviser reviews.
The Scheme is a signatory to the UN Principles for Responsible
Investment and the Trustee has partnered with a specialist
engagement service, Hermes Equity Ownership Services
(EOS), to exercise its global equity voting rights in accordance
with a detailed Trustee policy, which addresses a range of
governance, social and environmental issues. EOS has also
enhanced the Trustee’s stewardship and governance oversight
of investee companies by engaging with companies, on a
global basis, where management is considered not to be
acting in the best long-term interests of investors. The results of
these voting and engagement activities are published quarterly
on the M&S website. The Scheme is also a signatory to the
Financial Reporting Council’s UK Stewardship Code.
During 2012 all remaining DC assets in respect of employees
joining on or after 1 April 2002 were transferred to the new
Master Trust arrangement with Legal and General.