Every three years, the Fund’s Actuary (a qualified and independent professional) carries out a full actuarial valuation to assess the financial security of the Fund.
In the years between actuarial valuations, the Actuary produces an approximate update of the funding position. This is called an annual actuarial report.
An actuarial valuation is a ‘financial health check’ for the Fund. It compares the money the Fund has (‘assets’) against the expected cost of providing all current and future benefits to its members (‘liabilities’), this provides a ‘funding level’. If the liabilities are higher than the assets, the Fund has a shortfall. If the assets are higher than the liabilities, the Fund has a surplus.
The results of the latest annual actuarial report as at 31 March 2024 are detailed in the table below. They show that the funding level has decreased across both sections. The worsening of the funding position and decrease in the surplus has been primarily driven by asset returns being lower than assumed as a result of increases to bond yields and reductions to certain alternative matching assets.
The purpose of the SFS is to provide you with information about the Fund’s funding position. Everything required under the SFS can be found in this annual review. You can find further information about the Fund in the full Report and Accounts to 31 March 2024 at nationwidepensionfund.co.uk/library
In March 2021, the Nationwide Building Society (the Society) agreed to provide a Contingent Asset to the Nationwide Section of the Fund to provide increased security for members’ benefits, in certain circumstances. In light of the additional security provided by the Contingent Asset, following the 31 March 2022 valuation, the Trustee agreed that no further deficit contributions were due. This position will be reviewed at each future valuation.
By law, we have to let you know what the funding position would be if the Fund were to wind up (close), and members’ benefits had to be secured with an insurance company. If the Fund had wound up on 31 March 2022 (the date of the last formal valuation), the Nationwide Section assets of £6,515m would have covered around 71% of the estimated cost of securing the Sections benefits with an insurance company. The C&D Section assets of £318m would have covered around 95%.
The Society has no intention to wind up the Fund, and the Trustee has no reason to expect The Society to become insolvent.
In the unlikely event that the Fund is wound up and the Fund’s assets were insufficient to meet any shortfall, additional security may be provided through the Pension Protection Fund (PPF). You can find more information about the PPF at ppf.co.uk
Please note that we must include this information because we’re required by law. We do not currently intend to wind up the Fund.
We’re also required by law to confirm to you that the Fund hasn’t been modified by the Regulator and no directions, nor a schedule of contributions, have been imposed on the Fund by the Regulator.
