Marks and Spencer 2016 Annual Report Download - page 74

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72
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
The Group operates a defi ned benefi t
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
2015 revealed a surplus of £204m on a
technical provisions basis. This represents
a healthy improvement from a defi cit of
£290m as at 31 March 2012 as a result of
agreed recovery plan contributions from
the Company and outperformance of
return seeking assets over the period.
The scheme has also been fully hedged
against interest rate and infl ation risks
and was thus insulated from the e ect of
falling real interest rates. Scheme funding
is closely and frequently monitored and
diversifi cation of Scheme investment
risks continues.
The pension scheme, the assets of which
are held under trust separately from those
of the Group, is managed by the Board
of the Pension Trust (‘Trustee Board’).
The Trustee Board comprises four
Company nominated directors, including
the Chairman, Graham Oakley, three
member nominated directors and two
independent directors. All directors are
appointed for a fi ve year term and may
stand for additional terms.
The Trustee Board operates a number of
committees including: Management and
Governance, Investment and Audit to which
responsibilities are delegated. The Trustee
Board is supported by an executive team
who manage the governance and operation
of the scheme.
The Trustee Board has a business plan
against which progress is measured
periodically in a similar approach to the
Group Board. There is also an annual Board
E ectiveness Review and both the Trustee
Board and the Investment Committee
hold annual strategy days which help
drive the long term agenda and the
business plan priorities.
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 specifi c 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.
In addition to six monthly reports from
EY as covenant adviser, the Trustee Board
also receives presentations from the Chief
Finance O cer after the Group’s Year End
and Half Year results.
The scheme is a signatory to the UN
Principles for Responsible Investment
and the Financial Reporting Council’s UK
Stewardship Code. It 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
Board policy, which addresses a range of
governance, social and environmental
issues. The engagement of EOS enhances
the Trustee Board’s stewardship and
governance oversight of investee
companies by engaging with companies
on a global basis. The results of these
voting and engagement activities are
published quarterly on the M&S Pension
Scheme’s website.
PENSIONS GOVERNANCE
GOVERNANCE