Summary Funding Statement 2025
Every three years, the Scheme actuary completes a detailed funding valuation of the Scheme to check there is enough money to pay all the pensions that have been promised to members. Then, in-between these full valuations, the actuary also carries out less detailed annual funding checks.
The most recent detailed valuation was completed as at 30th September 2024, and the next one is due as at 30th September 2027. This statement sets out the results of the 2025 funding check and shows how they compare with the valuation carried out in 2024.
How is it done?
Imagine the Argos Section as a big tank full of money. We need to make sure there’s likely to be enough money in the tank to pay all the future pensions.
There’s a tap with money coming in (contributions paid in by Sainsbury’s, if any are due, as well as the money we make from our investments). There’s also a tap with money going out to pay pensions and the costs of running the Scheme.
We get an actuary to check the tank and make sure there’s enough in there – not just to pay pensions now but also in 40, 50 or even 60 years’ time. But they don’t have a crystal ball, so how much is ‘enough’?
The actuary makes lots of estimates about the future, like future inflation, investment returns and on average how long people will live. These estimates about the future are then discussed between the Trustee and Sainsbury’s. When they have been agreed, the actuary completes the calculation of the amount estimated to be needed in the tank.
The actuary then looks at how much money, made up of all the assets and investments, is in the Argos Section at the date of the valuation. They then compare it to how much is needed now to pay all the benefits in the future.
The result tells us, the Trustee, if there’s a shortfall or a surplus. If there is a shortfall, the Trustee and Sainsbury’s have to agree how to fill this. This is done every three years when any changes over that time are considered.
2025 funding update
Below are the results of the funding check as at 30th September 2025 and the full valuation as at 30th September 2024.
| Funding check at 30th September 2025 | Funding valuation check at 30th September 2024 | |
| Assets: how much money is in the Argos Section | £863 million | £1,003 million |
| Value of pensions promised: how much the Argos Section needs now to pay out all the pensions in the future | £825 million | £925 million |
| Surplus or (shortfall): the gap between the assets and the cost of pensions promised | £38 million | £78 million |
| Funding level | 105% | 108% |
The Argos Section’s assets and liabilities have both reduced between 30th September 2024 and 30th September 2025. This was mainly due to the increase in gilt yields over the period. Although the surplus is lower in 2025 than it was in 2024, the assets are still expected to be more than sufficient to cover the cost of paying pensions in the future.
As part of the 2018 funding valuation, the Trustee agreed with Sainsbury’s how much it would pay into the Scheme over the coming years and put in place the asset-backed contribution (ABC) arrangement. This uses Sainsbury’s stores to provide security to the Scheme and uses rent from the stores to make payments into the Scheme. This security and existing payment structure remains in place.
The previous Summary Funding Statement mentioned that the 2024 figures above included the value of the Argos Section’s interest of the asset-backed contribution (ABC) arrangement, as well as members’ Additional Voluntary Contributions, and we would include these details in our funding check each year going forward.
The funding figures above include the value of the Argos Section’s interest in the ABC arrangement, as well as members’ Additional Voluntary Contributions. The value of the ABC arrangement has decreased over the period as it has paid money to the Argos Section and the need for further contributions has reduced, and this is the main reason that the funding level has reduced.
Ongoing support
The 2025 valuation showed that the Argos Section had a surplus. As the assets cover the cost of paying the pensions, ongoing contributions are not required. Other arrangements are also in place for extra contributions to be made to the Argos Section if needed in the future.
When will the next funding valuation be carried out?
The next full funding valuation is due as at 30th September 2027. However, in the meantime, the actuary will carry out the annual funding check as at 30th September 2026, which we hope to share with you next year.
What happens if Sainsbury’s goes out of business?
At each funding valuation, the actuary also estimates whether the Argos Section would have enough assets to pay for all the promised pensions in the unlikely event that Sainsbury’s either wasn’t able to support the Argos Section financially or became insolvent. At 30th September 2024, this showed the assets would cover 96% (2021: 86%) of the promised pensions. Since 2021, this position has improved. In this unlikely event, we would also be able to access property-backed rights in the ABC arrangement, which would almost completely fill the gap. The reason this is lower than the 2024 funding levels shown in the table above is because we would measure the liabilities in the pension scheme differently – like an insurance company (which makes pensions more expensive to pay).
The law says that we need to give you this information and we want to be completely open with you, which is why we’re telling you this, but please be assured that Sainsbury’s remains committed to supporting the Scheme as a whole and is a successful business.
In the very unlikely event that Sainsbury’s was unable to support the Scheme, the Pension Protection Fund (PPF), set up by the Government, would protect your pension. You can find out more about the level of protection provided by the PPF at: www.ppf.co.uk
Payments to Sainsbury’s
By law, the Trustee must tell you whether there have been any surplus payments to Sainsbury’s out of the Scheme in the last 12 months. No surplus payments have been made in recent years.
The Pensions Regulator
The Trustee also needs to tell you if the Pensions Regulator has used its powers in relation to the Scheme over the last year, for example, by changing the way future benefits build up, or the way the funding target is worked out, or amending the employer contribution rate. The Regulator hasn’t used its powers in relation to the Scheme.
Climate change
The Trustee is required to produce a report assessing the impact of climate change on the Scheme. Our climate report can be viewed here. A hard copy is available on request.
