Multinational retail chain Debenhams has seen its net defined benefit pension deficits fall by £15.8m in the 26 weeks to 1 March 2014.

Deficits fell from £20m as at 31 August 2013 to £4.2m at the beginning of March this year.

In the same period, the fair value of scheme assets rose from £673.6m to £692.4m with DB obligations rising from £693.6m to £696.6m.

As at 31 August 2013, the total value of company contributions into the pension schemes was £10.4m. The value of contributions was recorded at £5.4m in March.

In accordance with the recovery plan for the group's pension schemes, which is intended to restore the schemes to a fully funded position on an ongoing basis, the group agreed to contribute to the pension schemes £8.9m per annum, on 1 April each year, for the period from 1 April 2012 to 31 March 2022 increasing by the percentage increase in the RPI over the year to the previous December.

Additionally, the group has agreed to cover the non-investment expenses and levies of the pension schemes, including those payable to the Pension Protection Fund.

The investment strategy for the group's pension schemes was changed during the year ended 3 September 2011. Investment of the schemes' assets is now arranged by AON Hewitt under a delegated consulting service agreement.

As at 1 March 2014, most of the schemes' assets are invested in a growth component or a liability hedging component.

Debenhams operates defined benefit type pension schemes, being the Debenhams Executive Pension Plan and the Debenhams Retirement Scheme, the assets of which are held in separate trustee-administered funds.

Both pension schemes were closed for future service accrual from 31 October 2006.

The closure to future accrual will not affect the pensions of those who have retired or the deferred benefits of those who have left service or opted out before 31 October 2006. Future pension arrangements are provided
through a money purchase stakeholder plan in the UK and Hong Kong or a defined contribution scheme for the employees in the Republic of Ireland and Denmark.

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