Every three years the Scheme undergoes a full actuarial valuation to measure the current assets of the Scheme against the amount needed to pay the benefits that members have built up. This helps the Trustee to make sure that the Scheme has enough funds now to pay benefits when they’re due in the future. In between full valuations the actuary provides an updated summary report on the Scheme’s position.
The results of the latest valuation are set out below:
- Liabilities – the amount of money we need to have set aside to pay all future benefits when they fall due, based on a range of assumptions, including life expectancy and future investment returns.
- Assets – the amount of money we have set aside in different types of investments.
- Surplus – the value of the assets less the value of the liabilities, resulting in a positive amount.
- Funding level – the outcome of the assessment shown as a percentage.
What do these results tell us?
The Scheme’s funding position has improved since the estimate shown in the last Summary Funding Statement.
This outcome means the Scheme is currently in a healthy financial position and the investment strategy continues to protect the funding position. It’s important to be aware that a surplus doesn’t mean there is too much money set aside. The value of the Scheme’s assets can go up or down over time and the assumptions used to work out the liabilities might change in the future too. The Trustee’s responsibility is to make sure that there continues to be a sufficient amount even when things change.
What happens next?
The Trustee will continue to work towards the aims of its long-term investment strategy, gradually taking less risk with how it invests the Scheme’s assets across a mix of investments.
What would happen if we could no longer support the Scheme?
All pension schemes have to give members an idea of what would happen in the unlikely event that the Company was no longer able to support future funding.
At every full valuation, the Scheme Actuary works out how much of the benefits built up by all members would be covered by the value of the Scheme’s assets at that date. The Actuary must assume that the Trustee uses the amount set aside to buy members’ pensions from an insurance company. The insurance company would then take on the responsibility for paying pensions going forward.
If we could no longer support the Scheme, we would be legally required to pay enough funds into the Scheme to secure the total amount of benefits earned with an insurance company. In the unlikely situation that we could not pay this amount in full; the Pension Protection Fund (PPF) may be able to take over the Scheme and pay compensation to members.
Other information
We provide the Trustee with regular financial updates so that they can, with independent expert advice, keep a close eye on the financial health of the business.