Retail giant Debenhams’ net pension surplus has almost doubled to £91.5m over the year on an IAS 19 accounting basis, despite pre-tax profits taking a £74.3m hit.

In its interim results, published today, 19 April 2018, Debenhams reported that the Debenhams Retirement Scheme (DRS) and the Debenhams Executive Pension Plan (DEPP) combined net surplus jumped from £46.8m as of 4 March 2017 to £91.5m as of 3 March 2018, driven by a reduction in liabilities.

The DEPP net scheme surplus was valued at £38.6m, while the DRS scheme surplus was reported at £52.9m, despite Debenhams contributing just £3m over the year. Both schemes were closed to future accrual from October 2006.

Despite this, the results revealed that an actuarial valuation of the scheme taken on 31 March 2017, showed the DRS scheme was in deficit on a technical provisions basis, though it did not reveal the size of the deficit.

In light of this, Debenhams said that a recovery plan was agreed, and that the group would contribute £5m per annum into the scheme from September 2017 to 31 March 2022.

The new agreement is almost half of an agreement made in 2015, in which the retail firm agreed to contribute £9.5m per annum up until 31 March 2022.

In October 2017, the group agreed to cover the non-expenses and levies of the pension schemes, including those payable to the Pension Protection Fund.

The interim results mean that Debenhams shares hit a nine-year low this morning, as they also announced that chief financial officer Matt Smith is to leave the group to take up the position of finance director at Selfridge.

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