18 Apr 2024

Trustee update on 31 December 2022 actuarial valuation and discretionary increase

In the Autumn 2023 Update we advised that the actuarial valuation as at 31 December 2022 was underway. At least once every three years, the SPS Scheme Actuary carries out a full financial health check of the SPS to work out the funding level. This formal process is called an actuarial valuation and its key purpose is to determine the amount that needs to be contributed to adequately fund members’ benefits.

We are pleased to report that the actuarial valuation was completed in advance of the 31 March 2024 deadline and the results showed a headline funding level of 103%.

As the valuation showed a surplus, we have agreed with LSEG that no deficit reduction contributions are required under this valuation agreement. We have however agreed that LSEG will continue to contribute towards the expected ongoing administrative expenses. The full results of the actuarial valuation as at 31 December 2022 and further details on how the funding level is calculated will be provided in the next Summary Funding Statement expected to be issued in June 2024.

Furthermore, we can advise that as part of the valuation negotiations, agreement has been reached to extend the current cost of living agreement by a further three years to 31 December 2027 (i.e. covering the pension increases payable from 1 January 2025, 1 January 2026 and 1 January 2027). This means pensions in excess of Guaranteed Minimum Pensions (GMPs) which were accrued prior to 5 April 1997 and would not otherwise increase, will continue to receive an annual pension increase in line with the Retail Prices Index (RPI) subject to a maximum of 2.5% p.a. 

The Trustee would like to thank LSEG for their engagement and positive approach to the valuation discussions.