Corporate report

Research Councils’ pension schemes annual report and accounts

• From: UKRI
• Published: 24 September 2025

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Presented to Parliament pursuant to Paragraphs 14(5) and 15(16) of Schedule 9 to the Higher Education and Research Act 2017.

Report of the manager

Statutory background

1. These Research Councils’ Pension Scheme (RCPS) statements have been prepared in accordance with the relevant provisions of the 2024 to 2025 government Financial Reporting Manual (FreM) issued by HM Treasury (PDF, 1.48MB).

2. The RCPS is an unfunded pension scheme operating by analogy to the Principal Civil Service Pension Scheme (PCSPS). Payments from the scheme are funded on a pay-as-you-go basis by current employees’ and employers’ pension scheme contributions, with the difference between these contributions and the RCPS expenditure financed by Grant-in-Aid provided by the Department for Science, Innovation and Technology (DSIT).

Management of the scheme

3. The RCPS is administered by Joint Superannuation Services (JSS), part of UK Research and Innovation (UKRI). The RCPS Management Board act as trustee of the Scheme and comprises representatives from the main participating employers along with a trade union representative. The RCPS Management Board is accountable to the Accounting Officer. The Accounting Officer for the Scheme is designated by the Accounting Officer of DSIT.

Description of pension schemes

4. The Nuvos scheme section commenced on 30 July 2007. Nuvos is a career average pension scheme, which together with the Partnership Pension Account, forms the pension options open to new starters since 30 July 2007. However, members who have a history of membership of the Classic, Classic Plus or Premium schemes may be allowed to rejoin their former arrangement depending on the time that has elapsed since they left their former employment and the terms they left under.

5. A Partnership Pension Account was made available to new staff from 1 October 2002. This is a defined contribution stakeholder scheme. The employers pay an age-related contribution to the employee’s chosen pension provider, and an additional 0.8% of pensionable pay to the RCPS to cover death in service and ill health benefits. The Partnership scheme liability or funding does not form part of the RCPS accounts.

6. A summary of the different scheme sections is set out below:

Table showing a summary of the different scheme sections

Scheme section	Open from and up to	Accrual rate	Normal scheme pension age
Classic (final salary)	1 Apr 1994 to 30 Sep 2002	One eightieth of final salary, plus lump sum of three eightieths of final salary	60
Classic (final salary)	1 Oct 2002 (existing members only, never open to new members)	One eightieth of final salary, plus lump sum of three eightieth of final salary (service to 30 September 2002). One sixtieth of final salary (service from 1 October 2002)	60
Premium (final Salary)	1 Oct 2002 to 29 July 2007	One sixtieth of final salary: optional lump sum	60
Nuvos (career average)	30 Jul 2007	2.3% of each year’s pensionable earnings adjusted for inflation: optional lump sum	65

7. The employee contribution rates and calculation methods are analogous to the PCSPS rates. For the period 1 April 2024 to 31 March 2025 the rates and annualised earning brackets were as follows:

Table showing rates and annualised earning brackets

Annualised pensionable earnings	Member contribution rate (%)
Up to £34,199	4.60
£34,200 to £56,000	5.45
£56,001 to £150,000	7.35
£150,001 and above	8.05

8. The scheme operates on a pay-as-you-go basis and is principally funded by employer and employee contributions from the participating organisations. The employer contribution rate has been 26.0% since 1 April 2010. The previous rate of 21.3% was payable from 1 April 2008 until 31 March 2010. Any annual shortfall between cash outgoings and cash contribution received is met by Grant-in-Aid received through the responsible authority for the scheme, DSIT.

Pension increases

9. Pensions are increased in accordance with the Pensions (Increase) Act 1971 and the Social Security Pensions Act 1975, with annual increases being determined by the prevailing Pensions (Increase) Order. The increase is applied on the first Monday after 6 April each year. In April 2024 pensions in pay were increased by 6.7% and by 1.7% in April 2025.

10. Members of the RCPS who leave service before the normal pension age are given a preserved pension award, provided they have at least two years’ service or have previously transferred in benefits from another pension arrangement. Preserved pensions are uprated annually in line with the provisions of the Pensions (Increase) Act 1971. Preserved members may also transfer their pension benefits to other pension arrangements.

Eligible staff

11. All employees of the participating employers, apart from staff on zero-hour contracts, were eligible to join the Nuvos scheme or pay into a Partnership Pension Account. Staff not eligible for RCPS membership are automatically enrolled into an alternative qualifying pension scheme by their employer.

Information for members

12. The JSS website gives more information about the scheme and its benefit entitlements.

Auditors

13. The accounts of the RCPS are audited by the Comptroller and Auditor General (C&AG) in accordance with Paragraph 14(5) of Schedule 9 of the Higher Education and Research Act 2017. The audit fee payable is £65,923 (2023 to 2024: £73,000).

14. No non-audit work was performed by the auditors on behalf of the RCPS during the year.

Participating employers

15. During 2024 to 2025 the following employers had active members enrolled in the RCPS:

• Diamond Light Source
• Moredun Research Institute
• Scotland’s Rural College
• UKRI
• UK Shared Business Services Ltd (UK SBS)

16. The following organisations participate in the RCPS as admitted bodies. These are organisations participating in the RCPS following a transfer of staff from a main RCPS participating employer, under HM Treasury Fair Deal for staff transfers principles, and which had active members enrolled in the scheme during 2024 to 2025:

• The Pirbright Institute
• Rothamsted Research
• The Rothamsted Centre for Research and Enterprise
• Babraham Institute
• Babraham Bioscience Technologies Ltd
• John Innes Centre
• Earlham Institute
• Norwich Bioscience Institute Partnership
• Quadram Institute Bioscience
• National Oceanography Centre
• UK Centre of Ecology & Hydrology
• Plymouth Marine Laboratory

Actuarial valuation

17. In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM normally requires the period between formal actuarial valuations shall be four years, with approximate assessments in intervening years. Formal actuarial valuations are used to determine the contribution rates.

18. The RCPS Management Board commissioned the scheme actuary, the Government Actuary’s Department (GAD) to undertake a new actuarial valuation as at 31 March 2022, the previous valuation was as at 31 March 2018. The 2022 valuation reflects HM Treasury 2023 Valuation Directions, including changes to the Superannuation Contributions Adjusted for Past Experience discount rate announced in the Spring 2023 Budget, and demographic assumptions based on Office for National Statistics mortality and population projections as well as scheme specific factors and assumptions proposed by GAD and approved by the RCPS Management Board. GAD completed the 2022 valuation in 2024 and the RCPS Management Board agreed that the current employer contribution rate of 26.0% shall be maintained.

Changes and events during 2024 to 2025

19. The Cabinet Office introduced a new Civil Service pension scheme in April 2015, called Alpha, which is in addition to the Principal Civil Service Pension Scheme (PCSPS) arrangements that comprise the Classic, Classic Plus, Premium and Nuvos Scheme sections. Alpha entirely replaced the PCSPS by 2022 for all future accruals. The RCPS is by-analogy to the PCSPS. The RCPS is not permitted to operate by-analogy to Alpha.

20. The RCPS has been working with the government since 2015 to develop and agree reforms, with the expectation that all RCPS members, pensioners and preserved members will eventually transfer to the Civil Service Pension Scheme arrangements managed under contract to the Cabinet Office. The transfer is anticipated to happen during 2026 to 2027. In the interim, new entrants have been and will continue to be automatically enrolled into the Nuvos section of the RCPS with an option to switch to a Partnership Pension Account. There are only two employers actively enrolling new staff into the RCPS, Diamond Light Source and UK SBS.

21. Most of the RCPS participating organisations use the Civil Service Compensation Scheme (CSCS) for managed voluntary and compulsory exits. The CSCS was reformed on 9 November 2016. The process which led to the reforms was the subject of a Judicial Review taken by the Public and Commercial Services union. The review concluded the consultation process was not followed and as a result the previous 2010 CSCS terms were reverted to in August 2017. The consultation on the introduction of new terms was ended in April 2025, resulting in the 2010 CSCS terms remaining in place, unchanged.

Looking forward

22. The Department for Work and Pensions (DWP) Pension Dashboard Programme will allow individuals to view information about their pensions, including the State Pension, in one place online. All pension schemes with more than 100 relevant members are required to connect to the Dashboard system by 31 October 2026. The RCPS Management Board have agreed the RCPS will connect in October 2025 in line with other public service pension schemes. JSS are leading the project and Heywood Ltd are the Integrated Service Provider that will connect the RCPS data to the dashboard ecosystem.

23. UKRI and the RCPS are continuing to work closely with DSIT and the Cabinet Office to plan the reform of the scheme and the transfer of all members and pensioners from the RCPS to the Civil Service Pension Scheme arrangements. Scheme reform is expected to happen during 2026 to 2027. RCPS Annual Accounts will continue to be prepared until the scheme closes.

Review of the financial statements

24. For the year ended 31 March 2025 there was overall net expenditure of £189.3 million (2023 to 2024: £183.8 million).

25. Income was £84.2 million in 2024 to 2025 compared to £84.0 million for 2023 to 2024.

26. In 2024 to 2025 the pension liability increased by £94 million from £4,113 million to £4,207 million. This is mainly due to:

• changes in financial assumptions underlying the present value of the schemes’ liabilities, which increased the liability by £34 million
• changes in demographic assumptions, which resulted in an actuarial gain of £4 million
• there are also experienced gain arising on the schemes’ liability of £5 million which is an decrease to the schemes’ liability

A full breakdown of the movement in the pension liability can be found in the accounts section.

Freestanding additional voluntary contributions

27. Members in service are entitled to make additional voluntary contributions (AVCs) under contracts between the employee and Scottish Widows or Standard Life, to secure additional pension benefits on a money purchase basis. Participating members each receive an annual statement of their contributions and investments directly from their AVC provider. Employee contributions are paid directly by the participating employer and accordingly contributions and AVC investments are not included in these accounts. No new AVC arrangements were permitted after August 2018, although existing arrangements held by members were able to continue.

Events after the reporting period

28. No reportable events occurred after the Reporting Period and before the C&AG certified these accounts. The financial statements do not reflect events after this date.

RCPS membership report

Table showing number in new schemes (RCPS)

New schemes (RCPS)	31 March 2025 number	31 March 2024 number
Current members in service	5,067	5,297
Pensions in payment	11,793	11,345
Preserved (deferred) pensions	8,471	8,804
Total	25,331	25,446

Table showing number in old schemes

Old schemes	31 March 2025 number	31 March 2024 number
Pensions in payment	4,003	4,103
Preserved (deferred) pensions	252	348
Total	4,255	4,451
Grand total	29,586	29,897

	31 March 2025 number	31 March 2024 number
Members in service at 1 April	5,297	5,624
Adjustment resulting from changes notified in current year	(23)	(37)
Adjusted figure for 1 April	5,274	5,587
New members in year	270	251
Leavers and retirements in year	(477)	(541)
Members in service at 31 March	5,067	5,297

Table showing current members in service by scheme

Current members in service by scheme	31 March 2025 number	31 March 2024 number
Classic scheme	921	1,032
Classic Plus scheme	96	107
Premium scheme	831	890
Nuvos scheme	3,219	3,268
Members in service at 31 March	5,067	5,297
Holders of Partnership Pension Accounts	97	397

Old schemes are Science and Engineering Research Council, Agricultural and Food Research Council, Economic and Social Research Council and Natural Environment Research Council Superannuation Schemes, which were combined to form the RCPS in 1994. Membership is reported this way to be consistent with prior reporting.

29. UKSBS and Diamond Light Source are the only participating employers enrolling all new staff into the RCPS. New entrants to the RCPS increased by 8%, up from 251 in 2023 to 2024 to 270 in 2024 2025. Active membership decreased by 4% from 1 April 2024 to 31 March 2025. Leavers and retirements in the year 2024 to 2025 decreased by 12% compared to 2023 to 2024.

30. The number of pensions in payment has increased by 2% and preserved (deferred) members decreased by 5%. Total scheme membership as at 31 March 2025 has decreased by 1% to 29,586, compared to 29,897 as at 31 March 2024.

Accounting Officer, Manager, Administrator, advisers and employers

Accounting Officer

Professor Dame Ottoline Leyser until June 2025

Interim Accounting Office: Siobhan Peters, Chief Finance Officer

UK Research and Innovation
Polaris House
North Star Avenue
Swindon
SN2 1UY

Scheme Manager and Administrator

Joint Superannuation Services (JSS)
Polaris House
North Star Avenue
Swindon
SN2 1UY

Any enquiries concerning the operation of the RCPS should be addressed to JSS. JSS is part of UKRI. UKSBS provides payroll, finance and HR services to JSS and UKRI.

Actuary

Sandra Bell, Chief Actuary

Government Actuary’s Department
15-17 Furnival Street
London
EC4A 1AB

The GAD is the appointed actuary for the RCPS.

Bankers

The Royal Bank of Scotland
2nd Floor 280 Bishopsgate
London
EC2M 4RB

Auditors

Comptroller and Auditor General

National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

Participating employers

UKRI

Polaris House
North Star Avenue
Swindon
SN2 1UY

UK SBS

Polaris House
North Star Avenue
Swindon
SN2 1UY

Diamond Light Source

Diamond House
Harwell Science and Innovation Campus
Didcot
Oxfordshire
OX11 0DE

Moredun Research Institute

Pentlands Science Park
Bush Loan
Penicuik
Midlothian
EH26 0PZ

Scotland’s Rural College

Kings Buildings
West Mains Road
Edinburgh
EH9 3JG

Siobhan Peters
UKRI and RCPS Interim Accounting Officer
8 July 2025

Statement by the Actuary

Introduction

1. This statement has been prepared by the GAD at the request of the JSS (the RCPS scheme manager). It provides a summary of GAD’s assessment of the scheme liability in respect of the RCPS as at 31 March 2025, and the movement in the scheme liability over the year 2024 to 2025, prepared in accordance with the requirements of chapter 12 of the 2024 to 2025 version of the Financial Reporting Manual.

2. The RCPS is a defined benefit scheme providing pension and lump sum benefits on retirement, death and resignation. The scheme is wholly unfunded. I am not aware of any informal practices operated within the scheme which lead to a constructive obligation.

3. The assessment has been carried out by calculating the liability as at 31 March 2022 based on the data provided as at 31 March 2022 and rolling forward that liability to 31 March 2025.

Membership data

4. Tables A to C summarise the principal membership data as at 31 March 2022 used to prepare this statement.

Table A: active members

	Total pensionable pay (per annum)	Total pensionable pay (per annum) £ million
Males	3,506	154.6
Females	2,442	88.1
Total	5,948	242.7

Pensionable pay is the actual figure.

Table B: deferred members

	Number	Total deferred pension (per annum) £ million
Males	5,076	23.5
Females	4,822	17.9
Total	9,898	41.4

Pension amounts include the pension increase granted in April 2022.

Table C: pensions in payment

	Number	Annual pension (per annum) £ million
Males	7,620	107.4
Females	5,355	31.9
Spouses and dependants	2,204	13.7
Total	15,179	153.0

Pension amounts include the pension increase granted in April 2022.

Methodology

5. The present value of the liabilities as at 31 March 2025 has been determined using the Projected Unit Credit Method (PUCM), with allowance for expected future pay increases in respect of active members, and the demographic and financial assumptions applying as at 31 March 2025. The current service cost (expressed as a percentage of pensionable pay) in respect of accruing costs in the year ended 31 March 2025 was determined using the PUCM and the demographic and financial assumptions applicable at the start of the year, that is, those adopted as at 31 March 2024 in the 2023 to 2024 accounts.

6. This statement takes into account the benefits normally provided under the scheme, including age retirement benefits, ill-health retirement benefits and benefits applicable following the death of the member. It does not include the cost of injury benefits (in excess of ill-health benefits). It does not include premature retirement and redundancy benefits in respect of current active members, although the assessment of liabilities includes pensions already in payment in respect of such cases.

Financial assumptions

7. The principal financial assumptions adopted to prepare this statement are shown in table D.

Table D: principal financial assumptions

Assumption	31 March 2025 per annum	31 March 2024 per annum
Nominal discount rate	5.15%	5.10%
Rate of increase in Consumer Price Index (CPI) inflation (informing increases to pensions in payment, deferred pensions and career average revalued earnings revaluation)	2.65%	2.55%
Rate of general pay increases	3.40%	3.55%
Rate of short-term general pay increase	4.70%	5.20%
Real discount rate in excess of: CPI inflation	2.40%	2.45%
Real discount rate in excess of: long–term pay increases	1.65%	1.45%
Expected return on assets	Not applicable	Not applicable

8. The assumptions for the discount rate and pension increases are specified by HM Treasury in the PES (2024) 09, dated 3 December 2024, and remain unchanged for these accounts. The PES assumptions reflect market conditions at the previous 30 November and are typically not amended for any changes between November and the accounting date.

9. The long-term salary assumption is set by the RCPS scheme manager, having taken actuarial advice, and is intended to be an average over the future careers of scheme members, with a recognition that increases in any particular year may be lower or higher than the assumption. The assumption allows for a reduction in our view of the long-term salary increases as well as lower short-term forecasts from the Office for Budget Responsibility (relative to CPI inflation).

10. The assessment of the liabilities allows for the known pension increases up to and including April 2025.

11. Additionally, for the accounts as at 31 March 2025, allowance has been made for known inflation experience up to March 2025 to inform, in part, the pension increase that is expected to apply in April 2026. This is consistent with the approach taken for the accounts as at 31 March 2024.

Demographic assumptions

12. Table E summarises the mortality assumptions adopted to prepare this statement, which were derived from the specific experience of the scheme membership, and other relevant sources. The table refers to the standard mortality tables prepared by the Continuous Mortality Investigation (part of the Actuarial Profession) known as the ‘S3 tables’ with the percentage adjustments to those tables derived with reference to scheme experience.

Table E: post-retirement mortality assumptions

Baseline mortality	Standard table	Adjustment
Males
Retirements in normal health	S3NMA	93%
Current ill-health pensioners	S3IMA	100%
Future ill-health pensioners	S3IMA	100%
Dependants	S3NMA	100%
Females
Retirements in normal health	S3NFA_M	107%
Current ill-health pensioners	S3IFA	100%
Future ill-health pensioners	S3IFA	100%
Dependants	S3DFA	86%

Standard table from the ‘S3’ series of standard tables published by the CMI and based on the experience of self-administered pension schemes. Separate tables are available based on experience of members split by sex, retirement type and pension amount band.

13. These assumptions in Table E above, and the other demographic assumptions such as commutation and family statistics, are in line with those adopted for the 31 March 2022 funding valuation of the scheme. Note that the accounts as at 31 March 2024 were also based on the assumptions adopted for the 2022 valuation.

14. Mortality improvements are assumed to be in line with the 2022 based projections for the UK published by the ONS in January 2025. This represents an update to the assumption used for the 2023 to 2024 accounts, where 2020-based improvements were used. Adopting the latest ONS 2022-based mortality projections for setting mortality improvements has also affected the liabilities disclosed. The impact is different for male and female members and also differs by age, due to the resulting changes in life expectancies. These differences are illustrated in Section 3.

15. The scheme’s actuarial factors were updated in 2023 to 2024 and, following a further review on the completion of the 2022 actuarial valuation in 2024, remain in force. Consistent to the accounts calculations as at 31 March 2024, these have been allowed for in the calculating the accounting position as at 31 March 2025.

16. Our advice on the selection of assumptions can be found in our assumptions and methodology report dated 20 February 2025.

Liabilities

17. Table F summarises the assessed value as at 31 March 2025 of benefits accrued under the scheme prior to this date based on the data, methodology and assumptions described in paragraphs 4 to 16. The corresponding figures for the previous year are shown for comparison.

Table F: statement of financial position

	31 March 2025 £ million	31 March 2024 £ million
Total market value of assets	nil	nil
Value of liabilities	4,210	4,116
(Deficit)	(4,210)	(4,116)
of which recoverable by employers	Not applicable	Not applicable

Accruing costs

18. The cost of benefits accrued in the year ended 31 March 2025 (the current service cost) is assessed as 25.8% of pensionable pay.

19. For the avoidance of doubt, the actual rate of contributions payable by employers and employees is not the same as the current service cost assessed for the accounts. Members contributed between 4.6% and 8.05% of pensionable pay, depending on the level of their pay. The actual employer contribution rate was determined as part of a funding valuation using different assumptions. Table G shows the employer and employee contributions during the year 2024 to 2025 as a percentage of pensionable pay and compares the total contributions with the current service cost assessed for the 2024 to 2025 accounts.

Table G: contribution rate

	2024 to 2025 % of pay	2023 to 2024 % of pay
Employer contributions	26.0%	26.0%
Employee contributions (average)	6.8%	6.6%
Total contributions	32.8%	32.6%
Current service cost (expressed as a %)	25.8%	32.4%

Note: employer contributions includes employer contributions of 0.3% of pay in respect of expenses.

20. The key difference between the assumptions used for funding valuations and accounts is the discount rate, although price inflation and salary increases are also determined differently. The discount rate for accounts is set each year by HM Treasury to reflect the requirements of the accounting standard IAS 19.

21. The pensionable payroll for the financial year 2024 to 2025 was £250 million (derived from contributions payable by employers over the year). Based on this information, the accruing cost of pensions in 2024 to 2025 (at 25.8% of pay) is assessed to be £65 million.

22. Past service costs arise when an employer undertakes to provide a different level of benefits than previously promised. I am not aware of any other events that have led to a significant past service cost over 2024 to 2025.

23. I am not aware of any events that have led to a significant settlement or curtailment gain or loss over 2024 to 2025.

Sensitivity analysis

24. The results of any actuarial calculation are inherently uncertain because of the assumptions which must be made. In recognition of this uncertainty I have been asked to indicate the approximate effects on the actuarial liability as at 31 March 2025 of changes to the most significant actuarial assumptions.

Table H – sensitivity to significant assumptions

Table showing sensitivity to significant assumptions

Change in assumption	Approximate effect on total liability %	Approximate effect on total liability £
Financial assumptions
(i) discount rate +0.5% per annum	-6.5%	– £274 million
(ii) (long-term) earnings increase +0.5% per annum	+0.5%	+ £21 million
(iii) inflationary (CPI) increases +0.5% per annum	+6.5%	+ £274 million
Demographic assumptions
(iv) additional 1 year increase in life expectancy at retirement	+3.5%	+ £147 million

Opposite changes in the assumptions will produce approximately equal and opposite changes in the liability. The discount rate sensitivity shown implies a scheme duration of circa 15 years.

25. The most significant financial assumptions are the discount rate, general earnings increases and inflationary increases (currently based on CPI). A key demographic assumption is pensioner mortality.

26. Table H shows the indicative effects on the total liability as at 31 March 2025 of changes to these assumptions (rounded to the nearest 0.5%).

Covid-19 and climate change

27. Covid-19 and climate change are areas where there remains significant uncertainty, which could affect both future economic and demographic experience. In line with previous years, the assumptions used in the preparation of the 2024 to 2025 Resource Accounts allow for the current impacts of Covid-19 and climate change to the extent that they are reflected in the market data used to set or derive assumptions.

28. The 2020-based population mortality projections allowed for the short-term impacts of Covid-19 for 2019 to 2024 in line with the average views of an expert independent panel. The 2022-based population projections consider Covid-19 as a mortality shock event, applying an appropriate short-term adjustment rather than projecting its effects forward. Death rates from Covid-19 in excess of that already allowed for in the mortality assumptions and reflected in the membership data would emerge as an experience gain in future years’ accounts.

Sandra Bell FFA
Chief Actuary
Government Actuary’s Department
22 May 2025

Statement of Accounting Officer’s responsibilities

Under the Higher Education and Research Act 2017, the Secretary of State for DSIT with the consent of HM Treasury, has directed the RCPS (the scheme) to prepare a statement of accounts for the year ended 31 March 2025 in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the situation of the Scheme and of its income and expenditure, Statement of Financial Position and cash flows for the financial year.

The combined financial statements must give a true and fair view of the state of affairs at 31 March 2025 and of the net resource outturn, changes in taxpayers’ equity and cash flows for the financial year then ended.

The financial statements are required to provide disclosure of any material expenditure or income which has not been applied to the purposes intended by Parliament, or material transactions which have not conformed to the authorities which govern them. The financial statements must be prepared so as to ensure the contributions payable to the scheme during the year have been paid in accordance with the scheme rules and the recommendations of the Actuary.

Following the end of Professor Dame Ottoline Leyser’s term as UKRI CEO in June 2025, I, Siobhan Peters, UKRI’s CFO, will serve as interim Accounting Officer (AO) for the 2024 to 2025 RCPS Annual Report and Accounts.

As UKRI’s and RCPS’ interim AO, I am required in preparing the accounts to comply with the requirements of the Government FReM and in particular to:

• observe the Accounts Direction issued by the Secretary for State, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
• make judgements and estimates on a reasonable basis
• state whether applicable accounting standards, as set out in the Government FReM, have been followed, and disclose and explain any material departures in the financial statements
• prepare the financial statements on a going concern basis
• confirm the annual report and accounts as a whole is fair, balanced and understandable; and I take personal responsibility for the Annual Report and Accounts and the judgements required for determining all reasonable steps have been taken to ensure the annual report and accounts as a whole are fair, balanced and understandable

DSIT has appointed the UKRI CEO as AO of the RCPS. The responsibilities of an AO, including responsibility for the propriety and regularity of the public finances for which the AO is answerable, are set out in Managing Public Money published by HM Treasury.

As the interim AO, I have taken all the steps I ought to have taken to make myself aware of any relevant audit information and to establish UKRI’s and RCPS’s auditors are aware of this information. So far as I am aware, there is no relevant audit information of which the auditors are unaware. I take personal responsibility for the annual report and accounts, and the judgments required for determining all reasonable steps have been taken to ensure the annual report and accounts as a whole are fair, balanced and understandable.

Governance statement by the Accounting Officer

1. Scope of responsibility

The Governance Statement, for which I take personal responsibility, gives a clear understanding of the dynamics of the RCPS, its governance, risk and internal control arrangements, and how successfully it coped with the challenges and opportunities presented in the year.

The statement explains how the RCPS has maintained a sound system of governance and internal control which supports the achievement of RCPS policies, aims and objectives, whilst safeguarding public funds and the RCPS assets. I am also accountable for ensuring the RCPS is administered prudently and economically, and resources are applied in accordance with HM Treasury’s Managing Public Money guidance and with the responsibilities assigned to me by the DSIT. I am also accountable for ensuring the annual report and accounts is fair, balanced and understandable.

DSIT’s responsibilities in respect of the RCPS are detailed in the Statement of Intent. This sets out the Grant-in- Aid funding requirement, DSIT’s role as sponsor, its responsibilities under the Public Service Pension Act 2013 and its duty to appoint an AO.

2. Governance framework

In my role as interim AO for the RCPS, I am supported by the UKRI Board and its Audit, Risk and Assurance Committee (ARAC), the Nominations and Remuneration Committee, the Executive Team within UKRI, and the RCPS Management Board.

2. UKRI Audit, Risk and Assurance Committee

The role of the ARAC is to support the UKRI Board and AO. It monitors the extent to which adequate controls are in place to ensure compliance with relevant codes and regulation and focuses on the risks to our organisation’s ability to achieve its objectives. It ensures our approach to assurance meets organisational need. To do this the committee constructively, yet firmly, reviews and challenges the reports of management as well as those of our internal and external auditors, with a particular focus on governance, understanding of risks, the related control environment and the integrity of our financial statements.

Meetings are attended by the National Audit Office (NAO) and the Government Internal Audit Agency (GIAA), and the committee meets with their representatives regularly, independently of management. In addition, a representative from DSIT attends ARAC meetings and in turn, the ARAC Chair has observed the DSIT Audit Committee. The DSIT ARAC has established a liaison arrangement with the UKRI ARAC to strengthen ties.

ARAC worked closely with management in the review of the annual report and accounts of UKRI, the Medical Research Council Pension Scheme and the RCPS.

Information on membership and attendance at meetings for the UKRI ARAC can be found in the UKRI annual report and accounts.

2.2 Nominations and Remuneration Committee

The UKRI Nominations and Remuneration Committee (NomCo) is chaired by the UKRI Chair, Sir Andrew Mackenzie.

Board members include:

• Priya Guha
• Nigel Toon
• Professor Nola Hewitt-Dundas
• Ruwan Weerasekera (ARAC Chair)

Dr John Fingleton left the committee at the end of his tenure.

I attend as interim AO with the CFO and Chief People Officer (CPO) invited as attendees without decision-making powers.

NomCo met five times during the year. It reports to and supports the UKRI Board by:

• maintaining oversight of senior leadership succession plans, appointments and awards
• determining the performance-related pay of the executive members of the board
• providing assurance of UKRI remuneration policy to the board
• providing assurance of UKRI performance-related policy and pay to the board
• providing assurance of UKRI pension schemes and their governance to the board
• maintaining oversight of the Board and Executive Committee effectiveness reviews
• maintaining oversight of the completion of annual appraisals for non-executive board members and senior executives

The NomCo oversees and provides assurance to the UKRI Board regarding pensions governance, ratifying strategic decisions relating to the RCPS and other pension schemes within UKRI’s remit.

2.3 RCPS Management Board

The RCPS Management Board acts as trustee of the scheme, is responsible for ensuring the scheme rules are adhered to, ensures the scheme is operated according to legislation, has oversight of reform planning and implementation, and ensures the scheme is administered efficiently and effectively by JSS.

See the Board’s terms of reference.

The board comprises representatives from the participating employers and a trade union representative. The board is ordinarily chaired by the UKRI CPO, who may choose to delegate the responsibility to an alternative appropriate senior person. Since October 2022 the role of Chair has been delegated to Tanya Robinson, UKRI Associate Director of Reward. The board are also responsible for reviewing these accounts and reporting.

The board met five times during 2024 to 2025. Formal minutes of the meetings are recorded and made available to the auditors. Board members and their attendance at those meetings were:

• Tanya Robinson, Chair of the Board (UKRI), attendance five out of five
• Angela Stead, UKRI, attendance five out of five
• Peter Thompson, UKRI, attendance five out of five
• Andrea Ward, Diamond Light Source, attendance three out of five
• Andrew Aitken, Diamond Light Source, attendance two out of five
• John Arnott, UKSBS, attendance three out of five
• Crispin Dawe, UKSBS, attendance four of five
• Claire Hargreaves, UKSBS, attendance one out of five
• George Ryall, Prospect Trade Union (UKRI), attendance four out of five

Crispin Dawe and Peter Thompson ended their membership on the board in December 2024. Claire Hargreaves joined the board in February 2025. Andrew Aitken attends in Andrea Ward’s absence.

The Head of JSS presents a report to the board at each meeting highlighting the operational effectiveness of JSS and its administration of the scheme, risks and issues which may emerge or change the profile, information concerning upcoming legislative, regulatory and policy changes. The board is also provided with reports on scheme financing, data protection, fraud and progress with major activities, including reform progress and planning.

The board reviews the reports and information provided at board meetings. It has noted the information provided is acceptable and of sufficient quality to enable members to carry out their duties as noted in their terms of reference. Decisions and actions are recorded formally and progress with actions is reviewed at each meeting.

2.4 Joint Superannuation Services (JSS)

The RCPS is administered by JSS, which operates as a unit hosted within the HR function of UKRI. JSS staff are contractually employed by UKRI.

3. Risk management

3.1 Capacity to handle risk

As Accounting Officer, I have overall responsibility for ensuring there is an effective risk management system in place within UKRI and the RCPS for meeting all relevant statutory requirements, and for ensuring adherence to guidance.

3.2 Risk management framework

The system of internal control is designed to manage risk to an appropriate and proportionate level in line with UKRI’s and RCPS’s approved risk appetite, in order to achieve policies, aims and objectives. RCPS and UKRI have a robust risk management framework designed to support informed decision-making concerning those risks that have the potential to impact our ability to achieve our objectives.

The framework provides a consistent approach to identifying, assessing and mitigating enterprise risks through implementing and monitoring controls and actions to reduce risk to levels which the organisation is willing to accept in pursuit of its objectives. The UKRI risk management framework includes a risk management policy, strategy and risk appetite statement.

Risk management practices comply with the requirements of the Five Principles as set out in the government’s Orange Book. Our practices and approaches are in turn supported by UKRI’s central team of qualified Risk Business Partners to embed effective risk management across UKRI. UKRI’s Risk and Assurance Management System provides an integrated and dynamic view of UKRI and RCPS risks, issues, assurance framework, policies and control environment.

The task of reviewing the RCPS risk management register is delegated to the Chair of the RCPS Management Board and Head of JSS. The Head of JSS regularly reviews the risk management register during the year with the UKRI Risk Business Partners. The RCPS Management Board formally considers and agrees the registered risks, with a focus on ensuring appropriate mitigating actions are being taken to manage risk in line with the RCPS risk appetite. RCPS specific risks are included within UKRI’s central risk and assurance management system.

The GIAA the key risks to the RCPS and JSS on a biennial basis as part of its internal audit programme until 2023. For 2024 the internal review was carried out by the UKRI Management Assurance Team, with agreement from the RCPS Management Board and the Head of JSS. The 2024 review focused on pension payments looking at a random sample of members who had entered retirement in the period 1 August 2023 to 31 July 2024. The review started in July 2024 and was completed in January 2025, with an overall audit opinion of Substantial Assurance.

The activities of the GIAA and UKRI Management Assurance in respect of the RCPS are reviewed by the ARAC and the scope of the internal audit plan for the coming year, which is based on the overall assessment of risk, is agreed. The ARAC reviews the RCPS annual report and accounts and the NAO Audit Report on the RCPS and plays a pivotal role in evaluating and reviewing the evidence supporting the Accounting Officer’s assurance statement on internal control.

4. System of internal control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives. It can therefore only provide reasonable, and not absolute, assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise risks to the achievement of the policies, aims and objectives of the RCPS, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently and effectively.

4.1 Regularity and propriety

UKRI and the RCPS are committed to establishing and applying appropriate regularity and propriety standards, including embedding appropriate cultures and behaviours. They do not tolerate any form of fraud, bribery or corruption. The key components in this regard are UKRI’s:

• Counter Fraud and Bribery policy and arrangements
• Gifts and Hospitality policy
• Whistleblowing policy
• Complaints policy
• Declarations of Interest policy

I confirm that for 2024 to 2025:

Neither I nor my staff authorised a course of action, the financial impact of which is that transactions infringe the regulatory requirements as set out in Managing Public Money:

• there were no novel, contentious or repercussive transactions
• there have been no instances of fraud identified within UKRI, the RCPS or UKSBS which materially impacted on the RCPS
• there were no whistleblowing cases concerning the RCPS
• there were no breaches of delegation identified within the RCPS

4.2 Register of interests

UKRI and the RCPS recognises the importance of ensuring transparency and compliance with the Seven Principles of Public Life. Declaring interests supports transparency and demonstrates the integrity of UKRI’s business and employees by providing assurance that any potential conflicts are considered and managed effectively.

UKRI employees and all persons engaged to represent or act on behalf of UKRI, or its affiliated organisations worldwide, are expected to comply with the highest standards of professional and ethical practice and are required to declare any interests which may conflict, or may be perceived to conflict, with UKRI’s business.

Interests are recorded and assessed in line with UKRI’s declaration of interests policy, using a self-service electronic portal. Additionally, the RCPS has a register of interest for all persons regularly attending RCPS Management Board meetings, which is reviewed annually.

4.3 Fraud risk assessment

During 2023 to 2024 UKRI commissioned a Fraud Risk Assessment (FRA) for all programmes, which extended to JSS and the RCPS. JSS participated in the FRA Working Group, sharing and reviewing processes, controls and policies related to the management of fraud prevention and detection. No issues or deficiencies were identified with JSS’s fraud-related controls and related processes. The working group comprised UKRI risk, assurance and fraud experts as well as representation from DSIT. Following the completion of the initial FRAs the working group continues to meet regularly as a forum for fraud-related discussion and initiative; JSS continues to be part of the Group. JSS’ FRA will be reviewed in 2025 with the UKRI Management Assurance Team.

4.4 Participation in the National Fraud Initiative

Since 2022, JSS has participated annually in the National Fraud Initiative (NFI) mortality matching exercise, before this participation was on a biennial basis. JSS provide pension in payment, preserved and deferred member data to the NFI, who match it against DWP deceased persons records. The NFI reports matches to JSS who investigate accordingly. JSS provided pension data for 25,555 members to the NFI in July 2024 and received 90 matches in August 2024 including 51 pensions in payment matches. All cases have been investigated and no fraud identified.

JSS participated in the 2025 NFI exercise, uploading data in June 2025.

4.5 Fraud awareness

An ongoing programme of fraud awareness is in place in UKRI with a mandatory on-line fraud and bribery training for all UKRI, which JSS staff participate in. Additional bespoke training has been provided to teams in UKRI with higher risk profiles. This has been supplemented by monthly fraud awareness training and staff participation in events organised by DSIT Counter Fraud Expert Services Team for International Fraud Awareness Week.

5. Information governance and security

Good information governance practices are essential, including the adoption of appropriate policies, procedures and controls to ensure information remains secure, effective and efficient. JSS is committed to protecting the personal data of RCPS members in accordance with the UK General Data Protection Regulation (GDPR) and the Data Protection Act 2018 by implementing robust policies, procedures, and security measures to ensure data is processed lawfully, fairly and transparently.

The JSS Accountability Framework ensures data information governance risks are reviewed regularly and managed through appropriate mitigating actions and that data protection practices maintain compliance to safeguard members personal data.

UKRI provides all employees with training on their responsibilities, including regular refresher sessions on information security and data protection. The JSS Data Protection Manager offers additional training and guidance to JSS staff. UKRI and JSS continuously monitor and assess information risks to identify and address any weaknesses, ensuring ongoing improvement of systems and procedure.

5.1 Data protection

JSS has a Data Protection Manager. UKRI has a designated Data Protection Officer who oversees data protection matters for both UKRI and JSS, ensuring that data protection activities align with legal and regulatory requirements. The Data Protection Manager collaborates closely with the UKRI Information Governance function to ensure good data protection practices. Through this collaboration, the Data Protection Manager has implemented measures to ensure that JSS remain compliant with the UK GDPR and the Data Protection Act 2018, maintaining good standards of security, accountability, and regulatory requirement.

Throughout the year, JSS and the scheme have remained compliant with applicable data protection laws. No personal data breaches or reportable incidents were recorded or reported to the Information Commissioner’s Office, reflecting JSS’s commitment to robust data security and governance practices.

6. Ministerial directions

There were no ministerial directions given in 2024 to 2025 (2023 to 2024 nil).

7. Assurance

7.1 Review of effectiveness

As AO, it is my responsibility to ensure a sound system of governance and internal control is being maintained. In 2024 to 2025 I look to the work of the ARAC, the RCPS Management Board, the internal audit service provided by GIAA, UKRI Management Assurance, the assurance opinion provided by the AO of UKSBS, and comments made by the NAO as our external auditors in their management letter and other reports to inform my view.

7.2 Executive accountability assessment

UKRI has an assurance framework that records the assurance available on the: legal, regulatory and government requirements that UKRI must adhere to good governance and best practice frameworks. The design of the assurance framework is aligned to HM Treasury guidance. This framework identifies and evaluates the different sources of assurance using a three lines model comprising: management, internal assurance, and independent assurance.

An annual executive accountability exercise was completed at the end of the year. The purpose of the exercise was to gain Executive Director-level assurance on their responsibilities set out in the UKRI Delegations Framework. These assurances were subject to a second line of supporting evidence by the Management Assurance Team and a challenge meeting with the Director Risk, Assurance, Counter Fraud and Investigations. The outcomes were reported to the PFO as well as to Executive Committee and ARAC. The 2024 to 2025 executive accountability exercise provided an overall medium level of assurance.

There were no assessments that recorded a low level of assurance in respect of the RCPS or JSS or of areas associated with the RCPS.

7.3 Government Internal Audit Agency (GIAA) opinion

The GIAA Head of Internal Audit (HIA) is required by the Public Sector Internal Audit Standards to provide me with an annual internal audit opinion and report. The HIA opinion is based primarily on the outcomes of audit engagements conducted during the 2024 to 2025 financial year but is also informed by knowledge gained from meetings with senior management, and attendance at governance forums and review of associated papers.

The HIA has provided me with an overall moderate assurance opinion of UKRI for 2024 to 2025.

7.4 UKSBS assurance

For the year 2024 to 2025, UKRI and JSS received services from UKSBS. UKSBS is a company wholly owned by its public sector customers and shareholders:

• Department for Business and Trade
• Department of Energy Security and Net Zero
• DSIT
• UKRI

The company aims to provide efficient HR and payroll, finance, procurement, and IT business services. We receive bi-annual assurance reports from UKSBS on the design and effectiveness of its internal control framework, and within the UKSBS Assurance Framework the company’s overall assurance status for the second half of financial year 2024 to 2025 remains at amber. UKSBS also receives its internal audit provision from GIAA and received three Substantial and three moderate audit opinions in the second half of 2024 to 2025.

Further narrative and detail of their annual assurance opinions are available within the UKSBS governance statement, which is published separately as part of its Annual Report and Accounts.

7.5 External audit

The RCPS and UKRI annual accounts are audited by the C&AG.

8. Risks and issues

The RCPS Management Board and the Head of JSS identify key risks and the possible threats or opportunities should these risks crystallise. They assess their probability, impact and proximity, and consider the inherent, current and target exposure levels. Existing controls and mitigation plans are reviewed alongside an indication of the current trajectory of the risk in the RCPS risk register.

The RCPS Management Board has oversight of the RCPS risk register, which was reviewed at the RCPS Management Board meetings. The RCPS Management Board ensures appropriate risks are recorded, mitigation plans are being delivered, and adequate controls are in place or planned.

As at 31 March 2025, the register had 15 risks. All had been agreed and were being monitored with effective controls and mitigation plans in place. Of the 15 risks, four were rated with a red risk score. The four red risks relate to:

• the reform and transfer of the RCPS to the Civil Service Pension Scheme arrangements, which risks an increase in employers pension costs, and an impact on the ability of JSS to continue delivering services to meet members and employer needs
• loss of staff from JSS which could affect service to employers and members during a significant period of change
• participation in the Pension Dashboard programme; the scale of work involved and impact of non-connection to the Pension Dashboard ecosystem within guidance published by the regulators
• potential decline in the service provided supporting the JSS pension database

Other risks relate to:

• GDPR data breaches or loss of personal information
• the impact of the potential decline of service provided by UK SBS and its effect on the payment of pensions
• the impact of potential loss of or decline in service and support provision for the JSS pension system databases
• new legislation or policies and their impact on core processes or resource
• fraud or misappropriation of pensions
• incorrect payments

All these risks have appropriate controls and mitigation plans in place.

9. Conclusion

I have considered the accounts and evidence provided by UKRI and RCPS in the production of this Governance Statement as well as independent advice and assurance provided by the organisation’s ARAC.

Based on the review outlined above, I conclude UKRI and RCPS have a sound system of governance, risk management and internal control that supports their aims and objectives for 2024 to 2025.

Siobhan Peters
UKRI and RCPS Interim Accounting Officer
8 July 2025

The certificate and report of the Comptroller and Auditor General to the House of Parliament

Opinion on financial statements

I certify that I have audited the financial statements of the RCPS (“the schemes”) for the year ended 31 March 2025 under the Higher Education and Research Act 2017.

The schemes’ financial statements comprise the schemes’:

• Statement of Financial Position as at 31 March 2025
• Statement of Comprehensive Net Expenditure, Statement of Cash Flows and Statement of Changes in Taxpayers’ Equity for the year then ended
• the related notes including the significant accounting policies

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK adopted international accounting standards.

In my opinion, the financial statements:

• give a true and fair view of the state of the schemes’ affairs as at 31 March 2025 and its net expenditure for the year then ended
• have been properly prepared in accordance with the Higher Education and Research Act 2017 and HM Treasury directions issued thereunder

Opinion on regularity

In my opinion, in all material respects, the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), applicable law, Practice Note 15 (revised) Audit of Occupational Pension Schemes in the UK Practice Note 10 Audit of Financial Statements and Regularity of Public Sector Bodies in the UK (2022). My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I am independent of the schemes in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the schemes’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the schemes’ ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the AO with respect to going concern are described in the relevant sections of this certificate.

The going concern basis of accounting for the schemes’ is adopted in consideration of the requirements set out in HM Treasury’s government FReM, which requires entities to adopt the going concern basis of accounting in the preparation of the financial statements where it is anticipated that the services which they provide will continue into the future.

Other information

The other information comprises information included in the accountability report, but does not include the financial statements and my auditor’s certificate and report thereon. The AO is responsible for the other information.

My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my certificate, I do not express any form of assurance conclusion thereon.

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

Opinion on other matters

In my opinion, based on the work undertaken in the course of the audit, the information given in the accountability report for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements.

Matters on which I report by exception

In the light of the knowledge and understanding of the schemes and its environment obtained in the course of the audit, I have not identified material misstatements in the accountability report.

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• adequate accounting records have not been kept by the schemes or returns adequate for my audit have not been received from branches not visited by my staff or
• I have not received all of the information and explanations I require for my audit or
• the financial statements and the parts of the accountability report subject to audit are not in agreement with the accounting records and returns or
• the governance statement does not reflect compliance with HM Treasury’s guidance

Responsibilities of the AO for the financial statements

As explained more fully in the Statement of AO’s responsibilities, the AO is responsible for:

• maintaining proper accounting records
• providing the C&AG with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters
• providing the C&AG with additional information and explanations needed for his audit
• providing the C&AG with unrestricted access to persons within the department from whom the auditor determines it necessary to obtain audit evidence
• ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statements to be free from material misstatement, whether due to fraud or error
• preparing financial statements, which give a true and fair view in accordance with HM Treasury directions issued under the Higher Education and Research Act 2017
• preparing the annual report, in accordance with HM Treasury directions issued under the Higher Education and Research Act 2017
• assessing the Schemes’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the AO anticipates that the services provided by the schemes’ will not continue to be provided in the future

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Higher Education and Research Act 2017.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

Identifying and assessing potential risks related to non-compliance with laws and regulations, including fraud

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

Considered the nature of the sector, control environment and operational performance including the design of the schemes’ accounting policies.

Inquired of management, the schemes’ head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Schemes’ policies and procedures on:

• identifying, evaluating and complying with laws and regulations
• detecting and responding to the risks of fraud
• the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the schemes’ controls relating to the schemes’ compliance with the Higher Education and Research Act 2017, Managing Public Money and the regulations set by The Pensions Regulator

Inquired of management, the Schemes’ head of internal audit and those charged with governance whether:

• they were aware of any instances of non-compliance with laws and regulations
• they had knowledge of any actual, suspected, or alleged fraud

Discussed with the engagement team and the relevant internal actuarial specialists, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, I considered the opportunities and incentives that may exist within the schemes for fraud and identified the greatest potential for fraud in the following areas: posting of unusual journals, complex transactions and bias in management estimates. In common with all audits under ISAs (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of the schemes’ framework of authority and other legal and regulatory frameworks in which the Schemes operate. I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the schemes. The key laws and regulations I considered in this context included the Higher Education and Research Act 2017, Managing Public Money, and regulations set by The Pensions Regulator.

I considered the control environment in place at the schemes, the administrator and the schemes’ actuary, and how this impacted membership data, the pension liability, contributions and benefits payable.

Audit response to identified risk

To respond to the identified risks resulting from the above procedures:

• I reviewed the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements
• I enquired of management, the Audit and Risk Committee and legal council concerning actual and potential litigation and claims
• I reviewed minutes of meetings of those charged with governance and internal audit reports
• I addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and other adjustments; assessing whether the judgements on estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business
• I communicated relevant identified laws and regulations and potential risks of fraud to all engagement team members including internal actuarial specialists and remained alert to any indications of fraud or non- compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website. This description forms part of my certificate.

Other auditor’s responsibilities

I am required to obtain sufficient appropriate audit evidence to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control I identify during my audit.

Report

I have no observations to make on these financial statements.

Gareth Davies
Comptroller and Auditor General

National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

10 July 2025

Statements

Statement of Comprehensive Net Expenditure for the year ended 31 March 2025

Table showing comprehensive net expenditure for year ended 31 March 2025

Principal arrangements: RCPS	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Income
Contributions receivable	3	82,881	83,244
Transfers in: individuals	4	675	624
Other pension income	7	20	9
Recoveries		617	158
		84,193	84,035

Expenditure	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Service cost	5	(65,000)	(82,000)
Transfers in	4	(675)	(624)
Enhancements	6	(1,000)	(1,000)
Pension financing cost	10	(206,000)	(183,000)
Administration costs	9	(857)	(1,172)
		(273,532)	(267,796)
Net (expenditure)		(189,339)	(183,761)

Other comprehensive net (expenditure)/Income	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Actuarial gains	15.14	(25,000)	(414,000)
		(25,000)	(414,000)
Total comprehensive net (expenditure)/Income for the year ended 31 March 2025		(214,339)	(230,239)

All activities are regarded as continuing.

Statement of financial position as at 31 March 2025

Current assets	Notes	31 March 2025 £’000	31 March 2025 £’000
Receivables	12	7,585	8,229
Cash and cash equivalents	13	17,620	16,832
Total current assets current liabilities		25,205	25,061

Liabilities	Notes	31 March 2025 £’000	31 March 2024 £’000
Payables (amounts falling due within one year)	14	(4,142)	(3,247)
Net current assets, excluding pension liability		21,063	21,814
Pension liability	15.10	(4,206,585)	(4,112,997)

	31 March 2025 £’000	31 March 2024 £’000
Net liabilities, including pension liabilities	(4,185,522)	(4,091,183)
Taxpayers’ equity
General fund	(4,185,522)	(4,091,183)

Statement of changes in taxpayers’ equity for the year ended 31 March 2025

Table showing changes in taxpayers’ equity

	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Balance at 1 April		(4,091,183)	(4,433,422)
Grant in Aid: drawn down	16	120,000	112,000
Combined net outgoings		(189,339)	(183,761)
Actuarial (losses)/gains	15.14	25,000	414,000
Balance at 31 March		(4,185,522)	(4,091,183)

Statement of cash flows for the year ended 31 March 2025

Table showing cash flows from operating activities 

Cash flows from operating activities	2024 to 2025 £’000	2023 to 2024 £’000
Combined net expenditure for the year	(189,339)	(183,761)
Decrease or Increase in receivables – principal arrangements	644	(6,900)
Increase in payables	895	632

Table showing decrease in provision for non-cash transactions

Decrease in provision for non-cash transactions	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Current service cost	5	65,000	82,000
Interest cost	10	206,000	183,000
Enhancements	6	1,000	1,000
Transfers in	4	675	624

Table showing increase in pension provision for use of pension liabilities 

Increase in pension provision for use of pension liabilities	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Benefit payments	15.12	(203,108)	(187,327)
Payments to or on account of leavers	15.13	(979)	(1,070)
Net cash outflow from operating activities		(119,212)	(111,802)

Table showing cash flows from financing activities 

Cash flows from financing activities	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Grant in Aid	16	120,000	112,000
Increase in cash and cash equivalents		788	198

Table showing cash and cash equivalents

	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Cash and cash equivalents at the beginning of the period	13	16,832	16,634
Cash and cash equivalents at the end of the period	13	17,620	16,832
Increase in cash		788	198

Notes to the schemes’ statements

Basis of preparation of the schemes’ statements

The schemes’ statements (PDF, 1.48MB) have been prepared in accordance with the relevant provisions of the 2024 to 2025 government FReM issued by HM Treasury, which reflect the requirements of International Accounting Standard (IAS) 19 (Employee Benefits) and IAS 26 (Retirement Benefit Plans). The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted or interpreted for the public sector context.

These accounts show the unfunded pension liability and movements in that liability during the year. These accounts also have regard to the Higher Education and Research Act 2017.

Where the FReM permits a choice in accounting policy, the accounting policy judged to be the most appropriate to the particular circumstances of the RCPS for the purpose of giving a true and fair view have been selected. The policies adopted by the RCPS are described below. They have been applied consistently in dealing with items that are considered material to the accounts.

The RCPS has been working with government since 2015 to develop and agree reforms, with the expectation all RCPS members, pensioners and preserved members will transfer to the Civil Service Pension Scheme.

The transfer is anticipated to happen during late 2026 to 2027. Notwithstanding this anticipated transfer, a going concern basis for the preparation of these financial statements has been adopted in accordance with the FReM due to the anticipated continuation of the provision of service in the future.

1. Research Councils’ Pension Schemes: principal arrangements

The schemes’ financial statement summarises the transactions of the RCPS, which acts as a principal. The Statement of Financial Position shows the deficit on the scheme. The Statement of Comprehensive Net Expenditure shows, amongst other things, the movements in the liability analysed between the pension cost, enhancements and transfers in and out, and the interest on the scheme liability. The actuarial position of the pension scheme is dealt with in the Report of the Actuary, and the scheme’s financial statements should be read in conjunction with that report.

Adoption of new or amended standards effective in 2024 to 2025

No new revised standards and interpretations have been applied by the schemes during the year.

Changes to IFRS: new standards issued but not yet effective. In accordance with the FReM, these financial statements have not been applied.

IFRS17: Insurance Contracts. This standard has been issued but is not yet effective for entities following the FReM. There are no material balances within the RCPS financial statements affected by the introduction of IFRS 17.

IFRS 18 Presentation and Disclosure in Financial Statements has been published in April 2024 is effective for periods beginning on or after 1 January 2027 No date has been issued about adoption by the FReM as yet. This is not expected to have a material effect on RCPS.

IFRS 19 Subsidiaries without Public Accountability is effective for periods beginning on or after 1 January 2027. This is not expected to be material to RCPS. No date has been issued regarding adoption by the FReM as yet.

2. Accounting policies

a) Contributions receivable

Income includes contributions received and receivable from payrolls run during the year by contributing employers.

b) Other pension income

Other pension income is accounted for when the income becomes due.

c) Pension cost and interest on scheme liabilities

The pension cost, including current and past service cost and interest cost on scheme liabilities, is calculated by the GAD). Payments by the schemes are treated as a reduction in the pension liability.

d) Transfers out

Transfers out are included once notified by the person transferring and by their new pension scheme, and the payment is due.

e) Transfers in

Transfers in are included once notified by the person transferring and agreed by their previous pension Scheme administrators, and the receipt is made.

f) Bulk transfers

These relate to groups of members who are transferred under Transfer of Undertakings (Protection of Employment) Regulations (TUPE) arrangements mostly due to the closure of a site or sites, or to changes to governance arrangements in their organisation.

g) Administration costs

The schemes pay for the JSS unit hosted by UKRI. The accrued costs of JSS are charged as an administration expense in the schemes’ Combined Statement of Comprehensive Net Expenditure. Any amounts owing to UKRI are included in payables. Any amounts owed by UKRI are included in receivables.

h) Agency arrangements: early retirement lump sums

Some pension schemes pay a retirement lump sum when a member reaches the appropriate scheme retirement age. If a leaver has yet to reach the scheme retirement age, then the early retirement lump sum (ERLS) is not payable from the scheme. Under an agency agreement with UKRI, the ERLS is calculated and paid from pension scheme funds and then invoiced to UKRI. Any ERLS paid but not yet recovered is accrued in recoveries and included in receivables.

Where pension schemes pay retirement lump sums when the member reaches the scheme retirement age they will, where there was an ERLS recovered from UKRI, pay the retirement lump sum to UKRI.

i) Pension liability

The movements and balance on the pension liability are calculated by the GAD. Accrued payments by the schemes are shown as reductions in the pension liability.

Actuarial gains and losses can occur for a number of reasons. These are: changes to financial assumptions used from year to year, such as a change in the inflation rate used; changes in demographic assumptions, that is the mortality rate, changes in the methodology used; and other experience gains and losses. All information on these changes is included in the accounts in accordance with the GAD report.

Lump sums on retirement and pensions are payable from the first day of retirement.

Refunds of contributions to members leaving the service are made up of any required transfer to the state scheme pension and income tax due, with the balance refunded to the member.

j) General fund

Grant-in-Aid is provided from DSIT. The cash received is not treated as income but is credited to the Statement of Taxpayers’ Equity in accordance with the FReM. Under the FReM grant in aid received by arm’s length bodies should not be accounted for as income but as financing through the General Fund.

Additional grant funding required to fund bulk transfers out of the scheme that is not met by the employers is credited to the General Fund in accordance with the FReM.

k) Cash and cash equivalents

Cash and cash equivalents comprise cash-in-hand and other short-term highly liquid investments which, being readily convertible to known amounts of cash, are subject to negligible risk of changes in value, and have an original maturity of three months or less.

l) Pension benefits payable

These are payments due to eligible members which arise from accrued service.

m) Lump sums payable on death in service

A death benefit lump sum is payable to whoever the Scheme member has nominated as their ‘death benefit nominee’ and is accounted for when due.

n) Additional voluntary contributions (AVCs)

Additional Voluntary Contributions Employee contributions are paid directly by the participating research council to the pension provider and accordingly contributions, and AVC investments, are not included in these accounts.

3.

Table showing contributions receivable

	2024 to 2025 £’000	2023 to 2024 £’000
Employers’ contributions	64,970	65,818
Employers’ contributions: purchase of added years and added pension
Employees’ contributions: normal	16,078	15,771
Employees’ contributions: purchase of added years and added pension	1,833	1,655
	82,881	83,244

For 2025 to 2026, £61 million in employers’ contribution, £16 million of employees’ and £1.8 million of added years contribution are forecast.

4.

Table showing transfers in

	2024 to 2025	2023 to 2024
Individual Transfers in from other schemes	(675)	(624)
	(675)	(624)

5.

Table showing service cost 

	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Current service cost	15.10	(65,000)	(82,000)
		(65,000)	(82,000)

6.

Table showing enhancements 

	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Enhancements	15.10	(1,000)	(1,000)
		(1,000)	(1,000)

7.

Table showing other pension income 

	2024 to 2025 £’000	2023 to 2024 £’000
Other income	20	9
	20	9

8. Additional voluntary contributions

There are no AVC payments made through the pension schemes in the current or prior year. Any AVCs made are free standing additional voluntary contributions which are private arrangements between the employee and the relevant institutions, and details cannot be included in these accounts. Details of arrangements whereby employees can make AVCs can be found in the ‘Freestanding additional voluntary contributions’ section.

9.

Table showing administration costs

	2024 to 2025 £’000	2023 to 2024 £’000
Total running costs	(658)	(719)
Auditors’ remuneration	(66)	(73)
Actuarial charges	(129)	(376)
Bank charges	(4)	(4)
	(857)	(1,172)

10.

Table showing pension financing cost 

	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Interest charge for the year	15.10	(206,000)	(183,000)
		(206,000)	(183,000)

11. Compensation benefits payable

There is no liability to the Pension Schemes as all compensation payments are funded by the employer.

12.

Tables showing receivables: contributions due in respect of pensions 

Analysis by receipt type	31 March 2025 £’000	31 March 2024 £’000
Prepaid lump sums	594	1,652
Pension contributions due from employers and employees	4,998	4,869
Other receivables	1,993	1,708
	7,585	8,229

13.

Table showing cash and cash equivalents 

	31 March 2025 £’000	31 March 2024 £’000
Balance at 1 April	16,832	16,634
Net change in cash balances	788	198
Balance at 31 March	17,620	16,832
The following balances at 31 March were held at:
Government Banking Service	17,620	16,832
Balance at 31 March	17,620	16,832

14.

Table showing payables: in respect of pensions 

Analysis by expenditure type	31 March 2025 £’000	31 March 2024 £’000
Payables to other research councils	(601)	(665)
Other payables (including administration expenses)	(3,475)	(2,509)
Audit fee payable	(66)	(73)
	(4,142)	(3,247)

15. Pension liabilities

15.1 Assumptions underpinning the pension liability

The RCPS are unfunded defined benefit schemes. The Statement by the Actuary on sets out the scope, methodology and results of the work the actuary has carried out. Each year GAD produce a scheme report and major assumptions used by the Actuary were:

See table in RCPS tables (PDF, 67KB).

The life expectancy of normal health current pensioners at age 60 for men is 27.7 (2023 to 2024: 27.9) and for women is 28.5 (2023 to 2024: 28.5). The life expectancy of normal health future pensioners at age 60 for men is 29.2 (2023 to 2024: 29.6) and for women is 30.2 (2023 to 2024: 30.1).

The life expectancy of normal health current pensioners at age 65 for men is 22.9 (2023 to 2024: 23.0) and for women is 23.9 (2023 to 2024: 23.6).

15.2

The schemes’ administrators are responsible for providing the Actuary with the information the Actuary needs to carry out the valuation. This information includes, but is not limited to, details of:

• scheme membership, including age and gender profile, active membership, deferred pensioner and pensioners
• benefit structure, including details of any discretionary benefits and any proposals to amend the scheme
• income and expenditure, including details of any bulk transfers into or out of the scheme
• following consultation with the actuary, the key assumptions that should be used to value the scheme liabilities, ensuring that the assumptions are mutually compatible and reflect a best estimate of future experience

15.3

Pension scheme liabilities accrue over employees’ periods of service and are discharged over the period of retirement and, where applicable, the period for which a spouse or eligible partner survives the pensioner. In valuing the scheme liability, the Actuary must estimate the impact of several inherently uncertain variables into the future. The variables include not only the key financial assumptions noted in the table above, but also assumptions about the changes that will occur in the future in the mortality rate, the age of retirement and the age from which a pension becomes payable.

15.4

These key assumptions are inherently uncertain, since it is impossible to predict with any accuracy future changes in the rate of salary increases, inflation, longevity or the return on corporate bonds. The actuary uses professional expertise in arriving at a view of the most appropriate rates to use in the annual valuation of the scheme liabilities. However, the schemes’ managers acknowledge that the valuation reported in these accounts is not certain, since a change in any one of these assumptions will either increase or reduce the liability. For example, on its own, even a small rise in the assumed rate of inflation will result in an increase in the pension liability.

15.5

The assumption that has the biggest impact on the amount of the reported liability is the discount rate net of price inflation. As set out in the FReM, and as required by IAS 19, the discount rate net of price inflation is based on high quality corporate bonds. The rates are set out in the table on the previous page. Any decrease in the rate leads to a significant increase in the reported liability.

15.6

In reality, the complexity and range of assumptions underlying the calculation of the pension liability are such that a change in one financial assumption is likely to have a knock-on effect on other financial assumptions. The schemes’ managers do not consider it useful to attempt to reflect the impact of any changes in the range of assumptions, since this would result in giving a range of inherently uncertain figures. In the opinion of the schemes’ managers, the actuary has used key assumptions that are the most appropriate for the scheme in the light of current knowledge.

15.7

The value of the liability on the Combined Statement of Financial Position may be significantly affected by even small changes in assumptions. For example, if at a subsequent valuation, it is considered appropriate to increase or decrease the assumed rates of inflation or increases in salaries, the value of the pension liability will increase or decrease. The administrators of the schemes accept that as a consequence, the valuation provided by the Actuary is inherently uncertain. The increase or decrease in future liability charged or credited for the year resulting from changes in assumptions is disclosed in note 15.9 Note 15.15 analyses experience gains or losses for the year, showing the amount charged or credited for the year because events have not coincided with assumptions made for the last valuation.

15.8

In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM requires that “the period between formal actuarial valuations shall be four years, with approximate assessments in intervening years”. An actuarial valuation of the scheme for the purposes of IAS19 and IAS26 has been carried out as at 31 March 2025 by rolling forward the liability calculated as at 31 March 2022 (the date of the last full actuarial valuation) to 31 March 2025. The 31 March 2022 liability calculations are suitably rigorous to ensure that the assessed liability as at 31 March 2025 is sufficiently accurate for the purposes of this report.

15.9

See table in RCPS tables (PDF, 67KB).

Sensitivity analysis

The results of any actuarial calculation are inherently uncertain because of the assumptions which must be made. In recognition of this uncertainty, IAS19 requires that the approximate effects on the actuarial liability as at 31 March 2022 of changes to the significant actuarial assumptions be shown.

The most significant assumptions are the discount rate, general earnings increases, and pension increase (currently based on CPI). A key demographic assumption is pensioner mortality.

As a result of the ongoing discussions on scheme reform, there remains significant uncertainty associated with how members will retire in future. Assumed patterns of age retirement after normal pension age can have a significant impact on liabilities in the final salary sections. So, an indication of the approximate effect (on the total past service liability) of non-Nuvos members retiring one year later has been included.

The table that follows shows the indicative effects on the total liability as at 31 March 2025 of changes to these assumptions (rounded to the nearest 0.5%).

Table showing indicative effects on the total liability as at 31 March 2025 of changes to these assumptions

Change in assumption	Approximate effect on total liability %	Approximate effect on total liability £
Rate of return
discount rate: +0.5% a year	-6.5%	-274 million
earnings increases: +0.5% a year	+0.5%	21 million
pension increases: +0.5% a year	+6.5%	274 million
Pensioner mortality
additional one year increase to life expectancy at retirement:	+3.5%	147 million

15.10

Table showing analysis of movements in the schemes’

Liability	Notes	2024 to 2025 £’000	2023 to 2024 £’000
Schemes’ liability at 1 April		(4,112,997)	(4,448,770)
Current service cost		(65,000)	(82,000)
Pension financing cost		(206,000)	(183,000)
Enhancements		(1,000)	(1,000)
Pension transfers in		(675)	(624)
Benefits payable	15.12	203,108	187,327
Payments to or on account of leavers	15.13	979	1,070
Analysis of actuarial (losses) or gains on the Schemes’ liabilities	15.14	(25,000)	414,000
		(93,588)	335,773
Schemes’ liability at 31 March		(4,206,585)	(4,112,997)

15.11

During the year ended 31 March 2024, employers’ and employees’ contributions represented an average of 32.8 percent of pensionable salaries (2023 to 2024: 32.6%. The employers pension rate for 2024 to 2025 and future years until further notice will be 26.0%.

15.12

Table showing analysis of benefits paid

	2024 to 2025 £’000	2023 to 2024 £’000
Pensions to retired employees and dependants net of recoveries or overpayments	182,083	169,450
Commutations and lump sum benefits on retirement or death	21,024	17,877
As per Combined Statement of Cash Flows	203,107	187,327

15.13

Table showing analysis of payments to or on account of leavers

	2024 to 2025 £’000	2023 to 2024 £’000
Refunds to members leaving service	513	372
Individual transfers to other schemes	466	698
As per Combined Statement of Cash Flows	979	1,070

15.14

Table showing analysis of actuarial gains/(losses) on the schemes’ liabilities

	2024 to 2025 £’000	2023 to 2024 £’000
Experience gains/(losses) arising on the schemes’ liabilities	5,000	(174,000)
Change in assumptions underlying the present value of schemes’ liabilities	(34,000)	531,000
Changes in demographic assumptions underlying the present value of scheme liabilities	4,000	57,000
Per Statement of Recognised gains and losses	(25,000)	(414,000)

15.15

See table in RCPS tables (PDF, 67KB).

15.16 Virgin media court case

The scheme is aware of the Virgin Media Limited v NTL Pension Trustees II Limited court case, and its implications for UK defined benefit pension schemes that were contracted out of the additional state pension between April 1997 and April 2016. The government announced on 5 Jun 2025 that it intends to introduce legislation to deal with issues arising from the judgment to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards.

16. Grant-in-Aid

Grant-in-Aid is provided by DSIT. The allocation for 2024 to 2025 was £120 million (2023 to 2024 was £120 million) of which £120 million was drawn down by the pension schemes.

17. Related party transactions

UKRI is a non-departmental public body sponsored by DSIT and is regarded as a related party. In addition DSIT are also the parent company of UKSBS who are also contributing to the scheme.

During the year none of the senior and other key management staff, or other related parties, has undertaken any transactions with the RCPS. The schemes have had transactions in the form of contributions from UKRI whose employees are members of the schemes.

See table in RCPS tables (PDF, 67KB).

18. Losses and special payments

No losses were incurred, or special payments made, during the year (2023 to 2024 nil).

19. Events after the reporting period

There were no reportable events after the reporting period between the year end and the date at which the C&AG certified the accounts, the date on which the accounts were authorised for issue. The financial statements do not reflect events after this date.

20. Financial instruments

As the cash requirements of the schemes are met through the estimates process, financial instruments play a more limited role in creating and managing risk than would apply to a non-public sector scheme of a similar size. The majority of financial instruments relate to contracts for non-financial items in line with the schemes’ expected purchase and usage requirements and the schemes are therefore exposed to little credit, liquidity or market risk.

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