The Trustee is responsible for ensuring that the Scheme has enough money set aside (assets) to pay pensions built up to date (liabilities). If the assets are more than the liabilities, the Scheme is said to be in surplus. If the liabilities are more than the assets, it is said to be in deficit.

The Scheme’s Actuary carries out a formal, in-depth financial health check of the Scheme every three years, called a full valuation. The last full valuation was carried out as at 30 June 2023. In the interim years the Actuary carries out annual funding reviews, which are approximate updates. Below you can see a summary of the Scheme’s financial health since 2022.

The funding position has stayed about the same since the valuation due to offsetting factors including rises in interest rates and changes to expectations of future investment returns.

What if the Scheme had to wind up?

Although there are no plans to wind up the Scheme, we are required by law to let you know the Scheme’s financial position if this were to happen. On wind up, the Trustee would probably secure all members’ benefits with an insurer. The comparison of the Scheme's assets with the cost of securing benefits with an insurer is the ‘buy out’ or ‘solvency’ level.

The estimated solvency level at June 2023 was 84%. This means that the amount needed to secure all benefits with an insurance company was approximately £1,622 million at June 2023. We do not receive formal updates of the solvency level in between full valuations.

Why does the funding plan not call for full solvency at all times?

The full solvency position assumes that members’ benefits will be secured by buying insurance policies. Once the insurer has collected the premium, it is not able to seek additional premiums if its pricing turns out to be too optimistic and so it includes significant margins against any potential future issues. As long as the Scheme is able to ask for further contributions from the Company in the event of future issues, and not buy insurance policies, it is appropriate to include cautious margins in the funding plan, but these are not as large as the margins needed on a full solvency basis using insurance premiums.

The Pension Protection Fund (PPF)

As a member, you may worry about the security of your pension. The PPF was set up in April 2005 to protect your pension benefits. It has been set up as a type of ‘compensation scheme’ where an annual levy must be paid by all defined benefit pension schemes (including this one). The PPF will pay a limited amount of compensation to members if an employer becomes insolvent and its scheme has insufficient money to pay a specified fraction of members’ benefits. However, any payments will generally be less than the full amounts due. Further information can be found on the PPF website at ppf.co.uk or by emailing information@ppf.co.uk

Other information required by law

The Pensions Regulator has powers to intervene in a pension scheme’s funding schedule and can impose a schedule of contributions if they feel it is necessary for the Scheme to meet the statutory funding objective. We’re happy to report that The Pensions Regulator has not used any of these powers in relation to the QinetiQ Pension Scheme.

We can also confirm that no payments have been made to the sponsoring employer from Scheme funds over the 12 months to 30 June 2024.

What next?

The next formal actuarial valuation of the Scheme is due at 30 June 2026. The Actuary will calculate interim figures at 30 June 2025, and we will let you know these in due course.

Where can I get further information?

If you have any other questions on the actuarial valuation, or would like further information about the Scheme, please email Gallagher at qinetiq@ajg.com

We are also required by law to tell you where you can view a copy of our most recent Task Force on Climate-related Financial Disclosures (TCFD) report. This is available in the Documents library on the Scheme website.