By Ian Pollock
Personal finance reporter, BBC News
Food stores will be closed as part of the cost savings
A crucial feature of Marks and Spencer's plan to save money is a big cut in the generosity of its final salary pension scheme.
This was once one of the most generous in the UK.
Until 2007, staff did not have to make any contributions to their fund and their pension built up at one-45th a year, rather than the slower and more common one-60th, or even one 80th, found at other schemes.
The retailer hopes that its pension cuts, along with a redundancy programme and store closures, will contribute to its plan to reduce its annual running costs by between £175m and £200m.
Of the retailer's cost-cutting target, about 20% will be met from shaving between £35m and £40m from its annual pension contributions of £300m a year.
In most final salary pension schemes, the whole of an annual pay rise boosts the final pensionable salary.
However, M&S plans to cap any increases in its staff's pensionable pay to just 1% per year, reducing the liabilities of its final salary pension scheme.
So, if someone at M&S was awarded a 3% pay rise, that would boost their take-home pay, but only the first 1% slice would improve their eventual pension.
Overall, this will severely reduce the future build-up of pension under the current M&S final-salary arrangement.
Nick Salter, a partner at actuaries Barnett Waddingham, said this sort of restriction was still very uncommon.
"This is one of the routes being looked at by companies to restrict the increases in pension costs," he said.
"It is a way to find some middle ground between traditional final salary schemes and defined contribution schemes."
Staff who joined the M&S scheme before 1996 will also find that their pensions will be cut more dramatically than before if they chose to retire early.
Most such schemes hinge on the idea that people pay in until they are 60 or 65, and then retire.
Retiring early means paying in for less time than anticipated and taking out for more, so the usual arrangement is to cut someone's accrued pension to date by a certain percentage for each year they retire early.
This "discounting", as it is known in the pension industry jargon, will now be more aggressive.
"We are aware that the proposed changes set out above will be difficult for those members of staff impacted," said M&S boss Sir Stuart Rose.
"But given that we expect challenging economic conditions to continue for at least the next 12 months, we believe we are taking the right action to maintain the strength of our business."
M&S has already revamped its pension scheme once before - just two years ago, when it had to deal with a deficit of £704m.
One option made available to staff was to have have their pensionable salary increases limited to 5% a year if they did not wish to continue not making any contributions.
The changes also involved the firm committing the rental income from £500m worth of its property portfolio (subsequently increased to £900m) to the scheme.
The company's most recent annual accounts show that as of March 2008, the scheme had swung back into the black, with a surplus of £484m.
But the big slump in share values in the past year may have pushed it back into the red since then.
A three-yearly review of the scheme will be published this year.
But a spokeswoman for the retailer said the current level of company contributions might swallow up about half the company's expected annual profits in the coming years, so the situation "was not sustainable for the long term".
The current scheme closed to new joiners in 2002, but it still has 21,000 contributing members, many of whom are in a section that does not require them to make any contributions.
The company said it would not be consulting directly with its staff over the planned limit on pension accrual.
However, they have been discussed by the company's staff consultative council.
A spokeswoman said the planned changes were to do with company pay policy, not the structure of the scheme itself, and that the scheme's trustees were "happy".