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 Sainsbury’s 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 Sainsbury’s 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 Sainsbury’s Section | £5,255 million | £5,850 million |
| Value of pensions promised: how much the Sainsbury’s Section needs now to pay out all the pensions in the future | £5,172 million | £5,757 million |
| Surplus or (shortfall): the gap between the assets and the cost of pensions promised | £83 million | £93 million |
| Funding level | 102% | 102% |
The Sainsbury’s 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 £10 million lower than it was a year ago, the cost of providing all the pensions in the future is also less, so the funding level has remained unchanged at 102%.
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 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 remain in place.
What happens now?
Since March 2025, the Sainsbury’s Section has been receiving payments of over £25 million a year from the ABC arrangement. These payments will continue until the earlier of the Scheme meeting its funding target (which is a different measure from the funding level confirmed above) or 2038. Other arrangements are also in place for extra contributions to be made to the Sainsbury’s Section if needed.
In the unlikely event that Sainsbury’s is unable to support the Scheme, the ABC arrangement gives the Trustee access to around £600 million, backed by property, for the Sainsbury’s Section. This security will remain in place until 2038.
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 Sainsbury’s 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 Sainsbury’s Section financially or became insolvent. At 30th September 2024, this showed the assets would cover 87% (2021: 81%) of the promised pensions. Since 2021, this position has improved, and we would also be able to access the 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.
