Every three years, with the support of the Scheme Actuary, we undertake a detailed review of the financial health of the DB Section, referred to as an Actuarial Valuation. In the intervening years the Actuary provides further funding updates. We share the results of these reviews with you in the form of our annual Summary Funding Statement. Last year was a Valuation year, so the Summary Funding Statement on the next few pages provides you with a formal report on the findings of the 2023 Valuation as well as a further funding update for this year.

The continued volatility in the economic climate has the potential to affect the DB Section’s financial health. However, I am pleased to confirm that the approach to investments taken by the Trustee over the past couple of decades has continued to protect the DB Section against this market volatility. Both the 2023 Valuation and the 2024 funding update showed the DB Section’s assets continued to have a greater value than the estimated cost of providing all the benefits built up by the DB Section members (our liabilities).

Within the Summary Funding Statement, you will see these assessments of the DB Section’s financial health are undertaken on two different bases: the Ongoing Target and the Scheme Solvency Target. One assumes, as is now the case, that the Company (M&G plc) can continue to financially support the DB Section, if required. The second looks at what the effect would be on our assessment of the DB Section’s financial health if this was no longer the case. You should not conclude that the inclusion of this alternate scenario indicates any degree of likelihood that the Company will no longer be able to support the DB Section.

Discretionary increases to pensions in payment

While some elements of the pension built up by members rise if there is an increase in the Consumer Prices Index (CPI) up to an annual limit, some elements do not.

It is for the Company to decide whether these elements that are not linked to the CPI should increase, and if so by how much, and whether any additional increases should be applied to any pension which is linked to the CPI. The Company must consider a number of factors before granting discretionary pension increases.

I am pleased to confirm that the Company decided to grant increases to those pension elements that are subject to this discretion with effect from 1 April 2024. The actual increase awarded was 5% in relation to pension built up before 6 April 1997 (excluding any Guaranteed Minimum Pensions). Pensions built up after 5 April 1997 also received increases on 1 April 2024 in line with statutory requirements. I am sure this was a very welcome increase in income to those pensioners that received this.

Viewing news and documents online

We are always trying to improve how we communicate with you, and we have recently made some changes to the news section of the website. We have integrated the annual Overview Newsletter into the website replacing the news section.

From now on Overview will be updated throughout the year with general pensions news and specific updates from the Scheme. To make the most of this development I would strongly encourage you, if you have not done so already, to register for digital communications. This means you will receive periodic emails, around three or four a year, signposting what new articles have been added. In addition, for more important updates, such as this Summary Funding Statement, you will receive an email as soon as the information is available to read online. We have included instructions as to how you can sign up to receive digital communications on page 12.

To take a look at what is currently published in Overview simply go to our Scheme website and select ‘Overview’ from the options in the main navigation bar.

Information about you

It is vital that the information we hold about you and your dependants is accurate. We use these details to calculate the cost of providing your pension benefits, and subsequently assess the financial health of the Scheme. You can view some of this information online in the secure area of the Scheme website, prudentialstaffps.co.uk. Simply look for the ‘MyPension – your secure member area’ button on the DB Section homepage.

Keeping your data safe is of paramount importance. Therefore, to access ‘MyPension’ you will need your username and password. If you have not registered, you can request the necessary information from the DB Section Administrator, whose contact details are on page 14.

In the meantime, I encourage you to visit our website for regular updates and topical pension-related news.

Best wishes.

Keith Bedell-Pearce CBE
Chairman of the Trustee of the
Prudential Staff Pension Scheme