Marks and Spencer Group PLC (M&S), SSE and Severn Trent have published their annual results for the year ending March 2025, revealing funding improvements across their defined benefit (DB) pension schemes.

As of 29 March 2025, M&S reported its IAS 19 net retirement benefit deficit was £122.7m, a decrease of £199.9m from the year before, which the firm said was primarily driven by changes to member mortality experience and a change in recognition of the Scottish Limited Partnership.

M&S is a general partner of the Marks and Spencer Scottish Limited Partnership, with the UK defined benefit (DB) pension scheme, which is a limited partner.

The partnership holds £1.3bn of properties at book value, which have been leased back to M&S.

However, in February 2025, M&S and the pension scheme trustee agreed to change the partners' entitlements to distributions from the partnership, whereby a third limited partnership interest replaced the first limited partnership interest and the second limited partnership interest.

The new third partnership interest entitles the scheme to receive £45m in June 2025 and June 2026 and £55m in June 2027 and June 2028.

From June 2029 to June 2035, the scheme will receive either £55m or £0, depending on its funding level as of the latest reporting date.

Under certain circumstances, these amounts may be retained in the partnership, with the distribution determined by the pension scheme's future funding position.

The scheme's most recent actuarial valuation was carried out on 31 March 2024, showing a funding surplus of £288m, a reduction compared to the previous position on 31 March 2021.

From March 2024 to March 2025, its net pension finance income stood at £4.1m.

With the pensioner buy-in policies purchased in September 2020, April 2019, and March 2018, the scheme has now insured around 70 per cent of the pensioner cash flow liabilities for pensions in payment.

Meanwhile, SSE, the Scottish energy company, revealed that the surplus across its two DB pension schemes increased by £80.2m, from £421.6m to £501.8m as of 31 March 2025.

The firm said this was primarily due to actuarial gains of £52.8m and contributions to the schemes.

The valuation of the SSE Southern scheme increased by £65.8m in 2024/25, a result of actuarial gains of £45.1m, driven by gains in actuarial assumptions and contributions to the scheme of £25.5m, and offset by losses on plan assets.

The Scottish Hydro Electric pension scheme's surplus increased by £14.4m, driven by actuarial gains relating to actuarial assumptions, and once again offset by losses on plan assets.

In addition to this, Severn Trent also confirmed that 31 March 2025 valuation for the Severn Trent pension scheme (STPS), the largest of the water company's three pension schemes, is now underway.

On an IAS 19 basis, the net position (before deferred tax) of all of the group's DB pension schemes was a deficit of £119.8m, down from £213m in 2024, and the funding level increased to 93 per cent, up from 86 per cent as of 31 March 2024.

---