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About SAUL ► Scheme Funding

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Glossary

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Contributions

Each SAUL employer and active member pays contributions to the SAUL fund. The level of contributions required is negotiated between the SAUL Trustee and the employers. Currently it is 6% of salary for active members and 13% of salary for SAUL employers.

The fund

The contributions are held in a common fund, rather than separate funds for each individual. The Trustee invests this money to provide investment income. The Trustee’s funding objective is to have enough money to pay members’ benefits now and in the future. SAUL is a defined benefit scheme, which means members’ benefits are calculated using a formula set out in the Scheme Rules and do not depend on investment returns.

Funding levels

The SAUL Trustee commissions a formal valuation of the Scheme every three years by our actuary to assess the Scheme’s financial position and compare the value of the fund (the assets) with the amount needed to pay members’ benefits (the liabilities). SAUL’s financial position is also monitored in intermediate years by conducting funding reviews. How far the Scheme’s assets cover its liabilities is called the funding level.  The valuation assesses the liabilities on different bases using different assumptions about investment return and how and when benefits are paid in the future:

• The ‘technical provisions’ basis values the Scheme’s assets against an estimate of the amount required to pay the benefits promised to members in the Scheme Rules.  By law, the assumptions underlying the technical provisions are set by the Trustee with the employers’ agreement. This basis is therfore specific to SAUL and the assumptions used are supported by the financial strength of the SAUL employers, their willingness to fund the Scheme, and the expected return on SAUL’s assets.

• The ‘secondary funding objective’ uses tougher assumptions about the future. The Trustee uses this basis to make investment and funding decisions, with the aim of maintaining stable contribution rates and ensuring that the Scheme’s assets will be enough to cover its expected ongoing liabilities.

• The ‘discontinuance basis’ shows an estimate of the position if the Scheme were to wind up and secure all members’ benefits with an insurance company.

The results of the last actuarial valuation can be found here.

Superannuation Arrangements of the University of London
1 King’s Arms Yard, London EC2R 7AF

Website last updated 18 May 2012

© 2012 SAUL Trustee Company