Pensions A-Z

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Scheme funding: Summary funding statements - components

The Summary Funding Statement (SFS) must contain:

• a summary, based on the last actuarial valuation of the extent to which the assets of the scheme are adequate to meet its liabilities as they fall due;
• an explanation of any change in the funding position of the scheme since the last actuarial valuation or, if applicable, the last SFS.
• any (or the latest) estimate by the actuary of the solvency of the scheme;
• whether any payment of surplus has been made to the employer in the last 12 months or since the date of the last SFS and, if so, the amount of the payment;
•  a summary of any recovery plan; and
• a note of whether the Pensions Regulator has modified the scheme, given it directions, or imposed a schedule of contributions upon it and, if so, details of the circumstances.

The SFS must be accompanied by a written statement that further information about the scheme is available, giving the address to which enquiries about it should be sent.

Optional extras

The Pensions Regulator suggests trustees consider including:

• an introductory paragraph explaining that the statement's purpose is to give members information about the funding of the scheme;
• an explanation as to the operation of a defined benefits scheme, i.e. that there is one common fund, as members often think that their own pension is in an individual account;
• a suggestion that if, as a result of its funding position, any members are considering leaving the scheme they should consider obtaining professional financial advice before taking this step;
• a reminder to members of the need to inform the trustees of any change of address;
• a summary of the scheme's investment policy;
• a reference to the protection offered by the Pension Protection Fund; and
• a list of the funding and related documents available on request.

Author: Emily Forrest