Public Employees Pension Fund (PEPF) Actuarial Valuation 2024

Published on: 30 March 2026

Presented by: Chief Minister

Reference: R.57/2026

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Executive summary

The key conclusions from the actuarial valuation at 31 December 2024 are set out below.

We have carried out a valuation of the Public Employees Pension Fund ("the Fund") as at 31 December 2024 under Regulation 3 of the Public Employees (Pension Scheme) (Funding and Valuation) (Jersey) Regulations 2015 (the "Funding and Valuation Regulations").

The assets of the Fund are used to provide pensions and other benefits under both the Public Employees Contributory Retirement Scheme ("the Final Salary Scheme") and the Public Employees Pension Scheme ("the Career Average Scheme"). As required by legislation, this valuation separately considers the funding positions of the Final Salary Scheme and the Career Average Scheme.

The Funding Strategy Statement dated 13 March 2026, that has been prepared by the Actuary after agreement by the Committee of Management and the Minister for Treasury and Resources, sets out the framework for the action to be taken at a valuation.

Final Salary Scheme

As required by the Funding and Valuation Regulations, the assumptions adopted for the Final Salary Scheme valuation have been determined by the Actuary. The Actuary has determined the assumptions following consultation with the Treasurer, and having reached agreement with the Committee of Management and the Minister for Treasury and Resources. It has been confirmed that the assumptions adopted to determine the funding liabilities for the Final Salary Scheme should be best-estimate assumptions.

Under best-estimate assumptions the future outcome is just as likely to be better or worse than assumed. The rationale for using best-estimate assumptions for the Final Salary Scheme is discussed in Appendix 4.

In the Final Salary Scheme, there was a surplus of £456.3M based on the assumptions adopted for the valuation, which is equivalent to a funding ratio of 119.5%.

In accordance with the provisions of the Funding Strategy Statement, it has been agreed that the surplus will be retained as a cushion against future adverse experience.

Career Average Scheme

The Career Average Scheme was introduced on 1 January 2016. New employees have been admitted into the Career Average Scheme since that date and, from

1 January 2019, most employees who had been accruing benefits in the Final Salary Scheme up to that date started to build up benefits in the Career Average Scheme.

As required by the Funding and Valuation Regulations, the assumptions adopted for the Career Average Scheme valuation are prudent assumptions. The assumptions have been agreed by the Committee of Management and the Minister for Treasury and Resources, following consultation with the Treasurer.

In the Career Average Scheme, there was a surplus of £125.3M based on the assumptions adopted for the valuation, which is equivalent to a funding ratio of 129.1%. In accordance with the Funding Strategy Statement, it has been agreed that the surplus will be retained as a cushion against future adverse experience.

The cost of accrual of future benefits in the Career Average Scheme as at the valuation date was 18.7% of pensionable earnings (including 0.8% of pensionable earnings in relation to transition costs).

Given that the contributions currently being paid are well in excess of the cost of accrual of future benefits in the Career Average Scheme, the Committee of Management and the Chief Minister have jointly agreed to reduce the average member contribution rate from the current 7.9%, to 6.9% of pensionable earnings, and to reduce the employer contribution rate from the current 16.0%, to 13.8% of pensionable earnings (maintaining the 2:1 employer to member contribution ratio targeted under the Regulations). This will result in a combined contribution rate of 20.7% of pensionable earnings.

In order to target an average member contribution rate of 6.9%, it has been agreed that the member contributions will be 6.77% (previously 7.75%) of pensionable earnings for ordinary members and 8.82% (previously 10.1%) of pensionable earnings for uniformed members.

It has been agreed that the revised employer and member contribution rates will apply for Final Salary Scheme members as well as for Career Average Scheme members, and that the revised contribution rates will be effective from 1 June 2026.

In line with the framework of the Funding Strategy Statement, the contribution rates will be reviewed at future actuarial valuations.

Mar 23, 2026 Signature Date

Contents

Executive summary.................................................................................................................. 2 Introduction .............................................................................................................................. 5 Developments since the previous valuation ........................................................................... 7 Information used ...................................................................................................................... 8 Valuation approach ................................................................................................................. 11 Asset data .............................................................................................................................. 17 Valuation results - Final Salary Scheme ............................................................................... 18 Valuation results - Career Average Scheme ........................................................................ 20 Risks and sensitivity analysis ................................................................................................ 22 Summary and conclusions .................................................................................................... 25

Appendix 1 – Scope of advice .............................................................................................................................28 Appendix 2 – Provisions of Fund ........................................................................................................................29 Appendix 3 – Membership data ..........................................................................................................................38 Appendix 4 – Rationale for best-estimate assumptions for Final Salary Scheme ............................................42 Appendix 5 – Valuation method ..........................................................................................................................44 Appendix 6 – Financial assumptions ..................................................................................................................45 Appendix 7 – Demographic assumptions ...........................................................................................................48 Appendix 8 – Summary of assumptions .............................................................................................................55 Appendix 9 – Discontinuance test ......................................................................................................................57 Appendix 10 – Rates and adjustments certificate ..............................................................................................59

Glossary .................................................................................................................................. 61

Introduction

This report has been prepared for the Committee of Management. It considers the financial position of the Fund as at

31 December 2024.

Legislation

The valuation has been carried out under Regulation 3 of the Public Employees (Pension Scheme) (Funding and Valuation) (Jersey) Regulations 2015 (the "Funding and Valuation Regulations").

The Funding and Valuation Regulations require:

• the overarching principles for the setting of assumptions for the valuation to be set out in the Funding Strategy Statement;

• the assumptions for the Career Average Scheme to be prudent and to be agreed by the Committee of Management and the Minister for Treasury and Resources, following consultation with the Treasurer; and

• following consultation with the Treasurer, the assumptions for the Final Salary Scheme shall be determined by the Actuary, who will aim to have firstly reached agreement with the Committee of Management and the Minister for Treasury and Resources.

Under the Funding and Valuation Regulations, a valuation of the Fund must be carried out at least once every three years.

The valuation has been carried out in accordance with the latest version of the Funding Strategy Statement dated 13 March 2026, which has been agreed by the Committee of Management and by the Minister for Treasury and Resources. The results of the valuation are based on the Regulations of the Fund in force at the valuation date.

Purposes

The purposes of the valuation, as specified in Regulations 3(4) and 3(5) of the Funding and Valuation Regulations, are:

• To separately identify the assets and liabilities of the Final Salary Scheme and Career Average Scheme;

• To assess whether any change in funding level is due to long-term trends of a demographic, investment or other nature;

• To assess whether the accrual of future benefits is affordable within the relevant contribution cost cap (i.e. 24.75% of pensionable earnings inclusive of member contributions); and

• To provide a rates and adjustments certificate specifying the future contributions, future pension increases, Career Average revaluation rate and Career Average accrual rate (in line with the Fund's risk-sharing framework and Funding Strategy Statement).

Previous valuation

Our previous valuation report dated 28 February 2023 considered the financial position of the Final Salary Scheme and the Career Average Scheme as at 31 December 2021.

Contributions since the previous valuation

Since the previous valuation contributions have been paid at the rates specified in the Fund's Regulations.

The Government repaid its share of the pre-1987 debt (referred to in the "Information used" section of this report) through a lump sum repayment of £337,523,873 on

31 May 2022.

Next valuation

The next valuation is due to be carried out no later than 31 December 2027.

Scope of advice

The report is prepared for the Committee of Management. Please see Appendix 1 for further details of the scope of advice.

Words used

Our report includes some technical pension terms. The words shown in bold print are explained further in the glossary.

For brevity, we have also used the following shorthand:

Shorthand Jersey RPI Regulations Salaries, Service

Fund

Final Salary Scheme

Career Average Scheme

Valuation date

What it means All Items Retail Price s Index for Jersey

See Appendix 2 As defined in the Regulations

Public Employees Pension Fund

Public Employees Contributory Retirement Scheme (referred to within the

Funding and Valuation Regulations as the "1967 Scheme")

Public Employees Pension Scheme (referred to within the Funding and

Valuation Regulations as the "Scheme")

31 December 2024

Snapshot view

The report concentrates on the Fund's financial position at the valuation date. As time moves on, the Fund's finances will fluctuate. If you are reading this report some time after it was produced, the Fund's financial position could have changed significantly.

Developments since the previous valuation

This section summarises the key developments since the previous valuation.

The financial health of the Fund depends fundamentally on how much cash is paid in, how well the assets perform, and on what benefits are paid out. The key developments since the previous valuation therefore include:

• The amount of contributions paid to the Fund.

• The actual returns on the Fund's investments.

• Whether there are changes to future expectations of benefit payments or investment returns.

These items are discussed later in this report. As well as these high-level points, please note the developments below.

Dealing with the 2021 valuation results

The valuation of the Final Salary Scheme as at 31 December 2021 revealed a surplus of £183.8M, equivalent to a funding ratio of 106.9%. In accordance with the provisions of the Funding Strategy Statement, it was agreed that the surplus would be retained as a cushion against future adverse experience and the Committee of Management and Chief Minister agreed that no adjustments to benefits or contributions were required at the valuation.

In the Career Average Scheme, there was a deficit of £6.1M as at 31 December 2021, equivalent to a funding ratio of 97.5%. Consistent with the provisions of the Funding Strategy Statement, it was agreed that no adjustments to benefits were required as a result of the valuation. It was also agreed that contributions would be continued at the current rates (employer contributions equal to 16% of pensionable earnings and member contributions equal to 7.75% of pensionable earnings for ordinary members and 10.1% of pensionable earnings for uniformed members).

Amendments to Regulations regarding benefit provision

Some minor amendments have been made to the Regulations regarding benefit provision but none of these changes have had a material impact on the funding position of the Fund.

Information used

The information used for the valuation is summarised below.

To carry out the valuation, we have obtained information separately for the Final Salary Scheme and the Career Average Scheme on:

• The assets held by the Fund.

• How benefit entitlements are calculated.

• Member data.

This section sets out a high-level summary of the information used. Further details are included in Appendices 2 and 3.

Assets

The Fund's assets had an audited market value of £3,331.1M at the valuation date.

The asset value for the Final Salary Scheme was £2,775.7M and the asset value for the Career Average Scheme was £555.3M.

All these figures are shown to the nearer £0.1M.

For further details, please see the Asset Data section.

Benefits valued

Members are entitled to benefits defined in the Regulations. We are not aware of any established practice of granting additional discretionary benefits and no allowance for such benefits has been made in this valuation. A summary of the benefits valued is set out in Appendix 2.

Pre-1987 debt

In 2003, agreement was reached between the Policy & Resources Committee (Act of Committee dated 20 November 2003) and the Committee of Management for dealing with the pre-1987 debt. By "pre-1987 debt" we mean the shortfall transferred to the Final Salary Scheme arising from the changes made to the Final Salary Scheme in 1987. The agreement was later reflected in changes to the Final Salary Scheme Regulations.

This valuation reflects the fact that the Government repaid its share of the pre-1987 debt through a lump sum repayment to the Fund of £337,523,873 on 31 May 2022. Certain other Employers who participate in the Fund remain liable to repay their outstanding share of the debt and this has been allowed for in the valuation.

Membership data

The valuation calculations use membership data supplied by the Public Employees Pension Team of the Government Treasury & Exchequer Department at 31 December 2024.

Final Salary Scheme

The following chart illustrates the membership profile of the Final Salary Scheme.

Active Members Deferred Pensioners Pensioners (incl.

dependants)

6,144 5,623

5,210 5,144

4,039

3,076 3,331 3,505 3,451

2018 2021 2024 2018 2021 2024 2018 2021 2024

Notes:

Active members' includes those transitional members who moved from the Final Salary Scheme to the Career Average Scheme on 1 January 2019 but retained a salary link to their Final Salary Scheme benefits.

The number of pensioners shown above includes spouses and dependants.

The illustration shows that there has been an increase in the number of pensioner members and a reduction in the number of non-pensioner members. Given the closed nature of the scheme, this trend will continue over time as the population of members with Final Salary Scheme benefits continues to mature.

Career Average Scheme

The following chart illustrates the membership profile of the Career Average Scheme.

Notes:

The number of pensioners shown above includes spouses and dependants.

The illustration shows that there has been a continued increase in the number of members. Given the open nature of the Scheme, this trend is expected to continue over time as new employees join the Career Average Scheme.

Please see Appendix 3 for a comprehensive summary of the membership data.

Reliability of information

We have carried out general checks to satisfy ourselves that:

• The information used for this valuation is sensible compared with the information used for the previous valuation.

• The results of this valuation can be traced from the results of the previous valuation.

However, the results in our report rely entirely on the accuracy of the information supplied.

Valuation approach

This section describes the approach taken for the valuation calculations.

Adequacy of contributions

The contributions to the Fund are specified in the Regulations governing the Fund and are paid so as to provide the benefits which will become payable to members when they retire or otherwise leave the Fund.

The factors affecting the Fund's finances are open to changing circumstances. Consequently it is necessary to review the operation of the Fund from time to time, by means of an actuarial valuation, to determine the adequacy or otherwise of the contributions to support the benefits payable under the Fund and to determine the affordability of future pension increases from the Fund.

Funding target and funding objective

In our review we start with the known facts about the Fund at the valuation date, i.e. the benefit and contribution structure, the membership and the assets. We then must make assumptions about the factors affecting the Fund's future finances such as investment returns, pay increases and rates of mortality, leaving service and retirement.

In order to calculate the value placed on the benefits (the "liabilities"), the benefits paid out by the Fund are estimated for each year into the future. The estimated benefit payments are then 'discounted back' to the valuation date using an assumed investment return known as the discount rate.

The benefit payments from the Fund are expected to be made for a very long period and Fund cashflows are linked to future levels of inflation – the charts below show the cashflow pattern for the Final Salary Scheme and then the Career Average Scheme respectively, covering benefits accrued up to the valuation date.

Final Salary Scheme

Pensioner Deferred Active

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Career Average Scheme

Pensioner Deferred Active

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

For the purpose of assessing whether the contributions are adequate to support the current benefits, it is appropriate to set a "funding and investment objective" and a "funding target".

• The funding and investment objective agreed by the Committee of Management is to provide benefits for all members in line with the Regulations including full future annual indexation in line with the Jersey RPI (or Jersey RPI + 1% for annual revaluation in service of Career Average Scheme members' accounts) and a full rate of accrual for future Career Average Scheme benefits of 1/66th, subject to taking an acceptable level of investment risk.

• The funding target is that the assets should be sufficient over the long term to support the benefits payable from the schemes in respect of service up to the valuation date, including full future indexation in line with the Jersey RPI (or Jersey RPI + 1% for annual revaluation in service of Career Average Scheme members' accounts) i.e. the assets should be sufficient to cover the liabilities in respect of service up to the valuation date.

The adequacy of contributions to cover future benefit accrual is considered separately. Valuation methods

A description of the methods used for the main valuation calculations is set out in Appendix 5.

Valuation assumptions

The results of a valuation are very sensitive to the assumptions made. The financial assumptions have a significant effect on the results of a valuation. However, the other assumptions, particularly the mortality assumptions, are also important.

Use of market-led financial assumptions

In both this valuation, and the previous valuation, we have adopted a market-led approach, which involves:

• market-led financial assumptions for valuing the liabilities, future contributions, and future pre-1987 debt repayments for the Final Salary Scheme; and

• valuing the assets at market value.

Prudent assumptions for the Career Average Scheme

To ensure there is prudence (caution) within the assumptions, the Funding Strategy Statement provides for the discount rate for the Career Average Scheme to be determined such that the probability of the actual investment return on the Career Average Scheme assets being higher than the discount rate over the 30-year period from the valuation date is at least 60%.

For this valuation it has been agreed that the discount rate for the Career Average Scheme should be set such that the probability of the actual investment return being higher than the discount rate over the 30-year period from the valuation date is equal to 80%. This reflects an increase in the agreed level of prudence relative to the prior valuation. However it should be noted that the probability of the Career Average Scheme assets outperforming the discount rate over the 3 year period from the valuation date is estimated to be lower: namely, between 50% and 60%.

All assumptions for the Career Average Scheme other than the discount rate are intended to be best-estimate assumptions i.e. for all assumptions other than the discount rate, the future outcome is just as likely to be better or worse than assumed. The caution within the assumptions for the Career Average Scheme is therefore captured entirely within the choice of discount rate.

Best-estimate assumptions for the Final Salary Scheme

It has been agreed that the assumptions adopted to determine the liabilities for the Final Salary Scheme should be best-estimate assumptions. The rationale for using best- estimate assumptions for the Final Salary Scheme is summarised in Appendix 4.

The discount rate is structured as follows:

• The initial discount rate is equal to the best-estimate investment return based on the strategic asset allocation reflected within the current Statement of Investment Principles (dated 30 January 2026).

• This discount rate applies for three years from the valuation date, from which point there are equal stepped reductions in the discount rate every three years to reflect an expected gradual reduction in investment risk.

• The triennial reductions in discount rate will continue until 1 January 2034, from which point a long-term discount rate is assumed which reflects an investment strategy appropriate to support pensioner liabilities.

Key financial assumptions

The following tables show the key financial assumptions used at this valuation and the assumptions used at the previous valuation for comparison. Important points to bear in mind are:

• The differences between the rates have a bigger impact on the results of the valuation than the absolute levels of each assumption.

• The assumptions were derived based on market conditions and views at the valuation date to ensure compatibility with the market value of the assets.

The derivation of the financial assumptions is compatible with taking assets at market value.

Assumption

Final Salary Scheme discount rate

Career Average Scheme discount rate

Jersey RPI inflation

Rate of pension increases in payment and deferment

Rate of general salary increases

2024

5.80% p.a. for the 3 years to

31 December 2027;

5.65% p.a. for the 3 years to

31 December 2030;

5.50% p.a. for the 3 years to 31 December 2033; and

5.35% p.a. thereafter

5.80% p.a. 2.85% p.a. 2.90% p.a. 3.35% p.a.

2021

For the period until 31 December 2031, 4.35% p.a.

Reducing immediately to 3.10% p.a. with effect from

1 January 2032.

4.40% p.a. 2.85% p.a. 2.85% p.a. 3.35% p.a.

Full details of the financial assumptions used for this valuation, and the reasons for the changes compared to the previous valuation, are set out in Appendix 6 to this report.

Comparison of financial assumptions with 2021 valuation

Overall (ignoring any changes to the demographic assumptions), the financial assumptions we have used for the 2024 valuation result in lower liabilities for the Final Salary Scheme and lower liabilities for the Career Average Scheme than if the assumptions used for the 2021 valuation had been retained. The main reason for this is that the discount rates relative to inflation are higher at this valuation.

Demographic assumptions

Other important assumptions used to value the liabilities include:

• the assumed current and future rates of mortality;

• the allowance made for the extent to which members will choose to exchange pension for a cash lump sum at retirement (at the rate of £13.50 cash lump sum for each £1 annual pension given up);

• the allowance for additional increases to the salaries of Final Salary Scheme members due to promotion, service or seniority; and

• the allowance made for the range of ages at which members in each membership category will retire in future.

Comparison of demographic assumptions with 2021 valuation

We have reviewed the extent to which the demographic assumptions adopted for the 2021 valuation of the Fund remain appropriate for the current valuation as at

31 December 2024 after analysing recent Fund experience and taking account of other relevant data. Full details of the demographic assumptions used for this valuation, and the reasons for any changes compared to the previous valuation, are set out in Appendix 7 to this report.

In the light of this review we have made some changes to the demographic assumptions. The overall net effect of these changes is to reduce the liabilities in the Final Salary Scheme and in the Career Average Scheme.

Regulatory framework

The Regulations specify the broad framework for the action to be taken at a valuation. A summary of the framework is set out below:

• Subject to the agreement of the Chief Minister, the Committee of Management may determine that no adjustments to benefits or contributions are required to be made in the Final Salary Scheme and/or the Career Average Scheme if the funding level of the relevant scheme is within the "funding corridor" of 95% to 105%;

• If the funding level of either or both the respective schemes is outside the "funding corridor" then the Actuary determines the adjustments required to benefits and contributions to restore either or both of the respective schemes to a 100% funding level, unless the Committee of Management and Chief Minister agree that no adjustments are required. The current policy agreed between the Committee of Management and the Chief Minister is that if the funding level is over 100% based on the maximum annual benefit increases, no adjustment will be made; surpluses will be retained as a cushion against later adverse experience or used to reduce risk;

• Employer contributions may be adjusted subject to a cap of 16.5% of total pensionable earnings;

• Member contributions may be adjusted subject to the weighted average contribution rate for the membership as a whole being not greater than the cap of 8.25% of pensionable earnings (unless an increase in this cap is agreed following consultation with relevant trade unions, as defined in the Funding and Valuation Regulations);

• The Career Average Scheme accrual rate may be adjusted provided it is not greater than 1/66th;

• The revaluation rate in service for the Career Average Scheme may be adjusted subject to a minimum of 50% of (Jersey RPI increase + 1%) and a maximum of 100% of (Jersey RPI increase + 1%);

• The annual pension increase for the Career Average Scheme may be adjusted subject to a minimum of 50% of Jersey RPI increase and a maximum of 100% of Jersey RPI increase; and

• The annual pension increase for the Final Salary Scheme may be adjusted subject to a minimum of 0% of Jersey RPI increase and a maximum of 100% of Jersey RPI increase.

• If the change in Jersey RPI is negative, the Jersey RPI increase will be taken to be 0% for the purpose of calculating pension increases and revaluations in service. In this situation, pension increases will therefore be 0% and the revaluation rate will be between 0.5% and 1%.

The detail of how it has been agreed the framework will apply in practice is documented in the Funding Strategy Statement.

Asset data

The audited accounts for the Fund for the year ended 31 December 2024 show the assets were £3,331.1M.

The Fund's assets are held separately from those of the Government of Jersey. The audited Fund accounts for the year ended 31 December 2024 show its assets as £3,331.1M.

The assets can be categorised as follows:

Asset backed Cash and net securities: current assets:

£257.2M £86.5M

Alternatives: £427.5M

Equities £1,235.8M

Private debt: £436.2M

Bonds: £526.8M

Property: £361.0M

Since the valuation date, the Final Salary Scheme and Career Average Scheme have adopted different investment strategies, reflecting their different liability profiles, and this is reflected in the choice of assumptions. In particular, the investment strategy for the Final Salary Scheme is anticipated to de-risk over time as the Scheme continues to mature. Further details of the investment strategies are set out in the Statement of Investment Principles dated 30 January 2026.

The Final Salary Scheme

The value of assets allocated to the Final Salary Scheme at the valuation date (before addition of the pre-1987 debt) was £2,775.7M.

In addition, the value placed on the pre-1987 debt at the valuation date is £21.9M. The Government repaid its share of the pre-1987 debt through a lump sum repayment of £337,523,873 on 31 May 2022. Certain admitted employers retain responsibility for repaying their respective shares of the pre-1987 debt over a period of time.

The Career Average Scheme

The value of assets allocated to the Career Average Scheme at the valuation date was £555.3M.

Valuation results - Final Salary Scheme

There was a past service surplus in the Final Salary Scheme at

31 December 2024 of £456.3M, equivalent to a past service funding ratio of 119.5%.

A detailed breakdown of the results of the main valuation calculations is given below.

£M

Actives 568.8 Deferred pensioners 320.0 Pensioners 1,406.6 Expenses 45.9 Value of past service liabilities 2,341.3 Value of investments 2,775.7 Value of future pre-1987 debt repayments 21.9 Value of assets 2,797.6 Past service surplus / (deficiency) 456.3 Funding ratio 119.5%

The above table shows there is a past service surplus of £456.3M at 31 December 2024, equivalent to a funding ratio of 119.5%.

Reasons for change in funding position

The past service surplus in the Final Salary Scheme at 31 December 2021 was £183.8M.

The chart below shows the key reasons for the change in past service funding position between 31 December 2021 and 31 December 2024.

£M

Surplus / (Deficit) at 31 December 2021 183.8

Interest on surplus / (deficit) 25.0

Investment returns -82.1

Salary increase experience -106.3

Deferred revaluation experience -65.6

Pension increase experience -233.9

Changes to financial assumptions 733.8 Changes to demographic assumptions 20.2

Introduction of expense reserve -45.9

Demographic and other experience 27.3

Surplus / (Deficit) at 31 December 2024 456.3

The analysis shows that the main factor which has contributed to the improvement in the funding position since the previous valuation has been the changes in financial assumptions, primarily an increase in expected future investment returns.

This improvement in the funding position has been partially offset by higher than expected salary increases and increases in deferred pensions and pensions in payment (as a result of higher than expected inflation) over the inter-valuation period, and by lower than expected investment returns being achieved over that period.

We do not see the improvement in funding level since 31 December 2021 as being indicative of a long-term trend of a demographic, investment or other nature.

Valuation results - Career Average Scheme

There is a past service surplus in the Career Average Scheme at 31 December 2024 of £125.3M, equivalent to a funding ratio of 129.1%.

A detailed breakdown of the results of the main valuation past service calculations is given below.

£M

Actives

Deferred pensioners

Pensioners

Value of past service liabilities Value of assets

Past service surplus / (deficiency) Funding ratio

Cost of accrual (including 0.8% transition costs)

Average member contribution rate

365.6 45.5 18.9

430.0 555.3

125.3 129.1%

18.7% of pensionable earnings 7.9% of pensionable earnings

The above table shows there is a past service surplus of £125.3M at 31 December 2024, equivalent to a funding ratio of 129.1%.

Reasons for change in funding position

The past service deficit in the Career Average Scheme at 31 December 2021 was £6.1M.

The chart below shows the key reasons for the change in past service funding position between 31 December 2021 and 31 December 2024.

£M

Surplus / (Deficit) at 31 December 2021 -6.1

Interest on surplus / (deficit) -0.8

Investment returns 6.4

Cost of accrual exceeding contributions -36.9

In service revaluation experience -38.2

Deferred revaluation experience -2.9

Pension increase experience -0.6

Changes to financial assumptions 174.8 Changes to demographic assumptions 22.2

Demographic and other experience 7.4

Surplus / (Deficit) at 31 December 2024 125.3

The analysis shows that the main factor which has contributed to the improvement in the funding position since the previous valuation has been the changes in financial and demographic assumptions, primarily an increase in expected future investment returns.

These factors have been partially offset by higher than expected revaluations to pensions (as a result of higher than expected inflation) and by the cost of benefits accruing (as assessed on the assumptions used at the previous valuation) exceeding the contributions paid.

We do not see the improvement in funding level since 31 December 2021 as being indicative of a long-term trend of a demographic, investment or other nature.

The cost of accrual has reduced from 27.2% of pensionable earnings at 31 December 2021 to 18.7% of pensionable earnings at 31 December 2024. The reduction in cost is primarily due to the increase in expected future investment returns.

Risks and sensitivity analysis

The Fund faces a number of key risks which could affect its funding position.

This section comments on some of the key risks faced by the Fund. It concentrates on the deterioration to the Fund's finances that may arise in various hypothetical downside scenarios (where the actual experience is less favourable than the assumptions made at this valuation).

For the Final Salary Scheme, as the assumptions used to determine the liabilities are best-estimate assumptions, upside scenarios (where the experience is more favourable than the assumptions) are considered just as likely as downside scenarios. For the Career Average Scheme, as the assumptions used to determine the liabilities are prudent assumptions, upside scenarios are considered more likely than downside scenarios.

Key risks

Here is a recap of some of the key factors that could lead to deficiencies in future:

• The risk that the liabilities are set too low and prove insufficient to meet the cost of benefits.

• Assumption changes – the risk that changes to the actuarial assumptions or method may increase the assessed value of liabilities.

• Investment risks – the risk that the return achieved on the Fund's assets may be lower than allowed for in the valuation, and also that the assets may not move in line with the value of the benefits. The Fund invests in assets (e.g. equities) that are expected to achieve a greater return than the assets (i.e. index-linked gilts and investment grade derivatives) that most closely match the expected benefit payments (index-linked gilts and derivatives would provide a broad match but these assets are linked to UK RPI whereas the Fund's benefits are linked to Jersey RPI). The less matched the investment strategy is, the greater the risk that the assets may not move in line with the value of benefits.

• Inflation risk – the risk that inflation is higher than assumed (which could be due to changes in the definition of Jersey RPI), increasing the pensions that need to be paid.

• Liquidity risk – the risk that cashflows are higher than expected as members commute more than is assumed or take transfer values, possibly leading to the sale of assets at inopportune times.

• Longevity risk – the risk that members could live longer than foreseen, for example, as a result of a medical breakthrough. This would mean that benefits are paid for longer than assumed, resulting in a higher cost of providing the benefits.

• Employer covenant risk – the risk that employers do not pay the contributions required under the Regulations.

• Membership changes – the risk that changes in recruitment or admission policies, or large scale redundancy/divestment programmes, increase the average cost of benefits. For example, an increase in the average age of the membership or an

increase in the proportion of uniformed members would increase the cost of providing the promised benefits.

• Options for members – the risk that members may exercise options resulting in unanticipated extra costs. For example, members could swap less of their pension for cash at retirement than is assumed.

• Legislative risk – the risk of unanticipated adverse changes to the legislative environment, e.g. changes to anti-discrimination law or tax changes which result in extra costs for the Fund.

• Other risks – issues relating to climate change and other environmental risks as well as long-term uncertainty around geopolitical, societal and technological shifts may also impact on the funding and investments of the Fund.

Risk mitigation

The Committee of Management takes an integrated approach to managing the Fund's risks. In particular, some actions taken to mitigate the above risks include:

• Surplus retention - the current policy agreed between the Committee of Management and the Chief Minister that if the funding level is over 100% based on the maximum annual benefit increases, no adjustment will be made; surpluses will be retained as a cushion against later adverse experience or to reduce risk.

• Regular review of investment strategy – A review of the investment strategy for each scheme is carried out at least every 3 years. The reviews will ensure that all risk including environmental, social and corporate governance risk inherent in the investment strategy continues to be appropriate given the maturity and funding position of the schemes at that time.

• Monitoring investment performance – the overall investment performance of the schemes, and performance of individual investment managers, is monitored regularly and considered at quarterly meetings of the Investment Subcommittee and the full Committee of Management. Actions that might be taken include changes to the investment strategy or changes to individual investment managers.

• Assumption setting - A robust process for determining valuation assumptions, including consultation with the Jersey Chief Economic Adviser and the Jersey Chief Statistician regarding Jersey inflation and pay increases, helps mitigate investment and inflation risks but the key risk remains that actual experience may be worse than assumed so regular monitoring is important. Longevity risk is mitigated by the use of mortality assumptions which reflect Scheme experience and an allowance for future improvements in mortality rates based on current views at the valuation date.

• Regular monitoring of the funding position - the funding position is monitored regularly and considered at quarterly meetings of the Committee of Management. Actions that might be taken include bringing forward a valuation (if the position is significantly worse than expected) or reducing the risk inherent in the current investment strategy (if the position is significantly better than expected).

• Member options – the terms for member options are set taking account of any possible funding strain and experience is monitored at each triennial funding valuation.

Quantifying the risks

To help the Committee of Management understand the susceptibility of the funding position to changes in the valuation assumptions, we have considered the hypothetical impact on the liabilities of a reduction in future investment returns relative to inflation.

Final Salary Scheme

• A 1% p.a. decrease in the assumed rate of future investment returns (or a 1% p.a. increase in the inflation assumption) reduces the funding ratio by approximately 15% (to around 105%).

• If longevity expectations increase such that life expectancy increases by around 1 year, then the impact on the funding ratio would be a reduction of around 4% (to around 116%).

Career Average Scheme

• A 1% p.a. decrease in the assumed rate of future investment returns (or a 1% p.a. increase in the inflation assumption) reduces the funding ratio by approximately 27% (to around 102%).

• If longevity expectations increase such that life expectancy increases by around 1 year, then the impact on the funding ratio would be a reduction of around 3% (to around 126%).

Investment strategy

The Fund's liabilities are influenced by Jersey inflation either directly via pension increases or indirectly via pay increases. The assets that most closely match the Fund's liabilities are index-linked gilts and investment grade derivatives. However, a large proportion of the Fund's assets are invested in asset classes such as equities which are expected to produce higher returns over the long term than those more closely matching assets.

The Committee of Management recognises the degree of risk, as well as the potential reward that this holds for the Fund. In particular the financial position of the Fund can be affected by sudden (or gradual) changes in market values of return seeking assets, changes in expected future returns and/or changes in inflation (or expected future inflation).

The investment strategy of the Fund is set by the Committee of Management and is kept under regular review. The Final Salary Scheme and Career Average Scheme have adopted different investment strategies, reflecting their different liability profiles. In particular, the investment strategy for the Final Salary Scheme is anticipated to de-risk over time as the Scheme continues to mature.

Summary

In summary the Fund is highly susceptible to:

• Equity markets (or other assets) falling or inflation rising;

• A reduction in future expected investment returns or an increase in inflation expectations; and

• Members living longer than expected.

Summary and conclusions

The Final Salary Scheme has a funding ratio of 119.5% and the Career Average Scheme has a funding ratio of 129.1% at the valuation date.

The headlines at the valuation date are:

• In the Final Salary Scheme there is a past service surplus of £456.3M, corresponding to a funding ratio of 119.5%.

• In the Career Average Scheme there is a past service surplus of £125.3M, corresponding to a funding ratio of 129.1%. The cost of accrual of future benefits in the Career Average Scheme is 18.7% of pensionable earnings (including 0.8% of pensionable earnings in relation to transition costs).

Developments since the valuation date

The funding positions of both schemes are estimated to have improved between the valuation date and the latest quarter-end date, 31 December 2025. This is due mainly to positive asset performance, and in the case of the Career Average Scheme, a lower value being placed on the liabilities arising from an increase in assumed future investment returns relative to Jersey RPI.

The cost of future benefit accrual in the Career Average Scheme is estimated to have reduced slightly over the same period due to the increase in expected future investment returns relative to inflation.

Projections

If experience were exactly in line with the valuation assumptions (and there were no future changes to those assumptions) then we would expect the funding ratio of the Final Salary Scheme to increase marginally over the period until the next valuation as a result of benefits being paid from the Scheme. However, in practice the development of the funding ratio at future valuations will depend critically on the experience of the Fund and any assumption changes, and this may impact very significantly on the funding ratio, either positively or negatively. We note also the risks to the funding position identified in the previous section of this report.

For the Career Average Scheme, the development of the funding ratio over the period until the next valuation will depend critically, among other things, on how the assumptions evolve regarding expected future investment returns relative to Jersey RPI. If there were no changes to the assumptions and experience were in line with those assumptions, the funding ratio is expected to reduce marginally over the period until the next valuation as the surplus is expected to become a smaller proportion of the liabilities as the Scheme grows over time. In practice the experience and assumptions are more likely to evolve significantly as conditions change, and this may impact very significantly on the funding ratio, either positively or negatively. We note also the risks to the funding position identified in the previous section of this report.

Actions arising from the valuation

The Final Salary Scheme

In accordance with the Funding Strategy Statement, the current agreed policy of the Committee of Management and the Chief Minister is that where the funding ratio (based on the maximum annual benefit increases) exceeds 100%, no adjustment to benefits will be made.

In accordance with that policy, the Committee of Management and Chief Minister have agreed that no adjustments to benefits are required following this valuation and that the surplus will be retained and used to act as a cushion against future adverse experience.

The Career Average Scheme

Affordability of future benefits

Under the Funding and Valuation Regulations, we are required to include within the valuation report an assessment of whether the accrual of future benefits under the Final Salary Scheme and the Career Average Scheme is affordable within the overall long-term cost cap set out within the Regulations.

The process for determining whether adjustments are required to benefits and/or contributions is set out in section 3 of the Funding Strategy Statement. Under the current policy, as the cost of accrual of future service benefits is less than 24.75% of pensionable earnings:

• The contribution rates are jointly agreed between the Committee of Management and the Chief Minister; and

• The accrual rate for future Career Average Scheme benefits will be retained at 1/66ths (which is the maximum accrual rate allowed under the Regulations).

In line with the framework of the Funding Strategy Statement, the contribution rates will be reviewed at future actuarial valuations.

Allocation of contributions to cover Final Salary transition costs

In accordance with paragraph 4.2 of the Funding Strategy Statement dated 13 March 2026, from the total contributions paid into the Fund with effect from 1 January 2026, our advice is that the following contributions should be allocated to the Final Salary Scheme rather than the Career Average Scheme to cover transition costs:

• 7.8% of salaries of continuing members for the period from 1 January 2026 to 31 May 2026 and 11.0% of salaries of continuing members from 1 June 2026 (representing the cost of benefit accrual in the Final Salary Scheme of 31.1% of salaries multiplied by 1.02 to allow for the build-up of additional Final Salary Scheme expense reserve less allowance for the standard contributions paid to the Final Salary Scheme); plus

• £840,000 per year over the period up to 31 December 2032.

An adjustment to the allocation of contributions which has already been made for 2025 (in accordance with the Funding Strategy Statement dated 17 January 2023) should also be made such that the total contributions allocated to the Final Salary Scheme in respect of 2025 will be equal to 5.9% of salaries of continuing members (representing the cost of benefit accrual in the Final Salary Scheme as determined at the 2021 actuarial valuation multiplied by 1.02 to allow for the build-up of additional Final Salary Scheme expense reserve less allowance for the standard contributions paid to the Final Salary Scheme) plus £840,000.

"Continuing members" are those members who opted to continue accruing benefits in the Final Salary Scheme (members eligible to choose to continue in the Final Salary Scheme were those within 7 years of Normal Retirement Age at 31 December 2018, as well as certain other members accruing benefits on older benefit structures).

In addition, allocations of money may need to be made to (or from) the Final Salary Scheme in accordance with paragraphs 4.8 to 4.10 of the Funding Strategy Statement.

Rates and adjustments certificate

The rates and adjustments certificate required under the Funding and Valuation Regulations is attached as Appendix 10. The rates have been calculated based on the actuarial assumptions set out in this valuation.

Appendix 1 – Scope of advice

Framework

This report has been requested by the Committee of Management. It has been prepared under the terms of the agreement between Aon Solutions UK Limited (formerly Aon Hewitt Limited) and the Committee of Management, on the understanding that it is solely for the benefit of the addressee.

Unless prior written consent has been given by Aon, this report should not be disclosed to or discussed with anyone else unless they have a legal right to see it.

Notwithstanding such consent, Aon does not accept or assume any responsibility to anyone other than the addressee of this report.

TAS compliance

This document, and the work relating to it, complies with Technical Actuarial Standard 100: Principles for Technical Actuarial Work' (TAS 100') and Technical Actuarial Standard 300: Pensions' (TAS 300').

The compliance is on the basis that the Committee of Management is the addressee and the sole user and that the document is only to be used as a summary of the outcome of the valuation. If you intend to make any decisions after reviewing this document, please let us know and we will consider what further information we may need to provide to help you make those decisions.

Appendix 2 – Provisions of Fund

Regulations

This valuation has been carried out under Regulation 3 of the Public Employees (Pension Scheme) (Funding and Valuation) (Jersey) Regulations 2015 (the 'Funding and Valuation Regulations').

The Regulations require each valuation of the Fund to separately identify the assets and liabilities of the Public Employees Contributory Retirement Scheme (the Final Salary Scheme) and the Public Employees Pension Scheme (the Career Average Scheme').

The Funding and Valuation Regulations require:

• the overarching principles for the setting of assumptions for the valuation to be set out in the Funding Strategy Statement (the "FSS");

The Final Salary Scheme is governed by Regulations made under the Public Employees (Retirement) (Jersey) Law, 1967 (as amended). At the valuation date, the provisions of the Final Salary Scheme were specified in the following Regulations, namely:

• The Public Employees (Contributory Retirement Scheme) (Former Hospital Scheme) (Jersey) Regulations, 1992 (as amended) - known as the FHS Regulations

• The Public Employees (Contributory Retirement Scheme) (Jersey) Regulations, 1967 (as amended) - known as the 1967 Regulations

• The Public Employees (Contributory Retirement Scheme) (Existing Members) (Jersey) Regulations, 1989 (as amended) - known as the Existing Members Regulations

• The Public Employees (Contributory Retirement Scheme) (New Members) (Jersey) Regulations, 1989 (as amended) - known as the New Members Regulations.

In addition, the provisions of the Final Salary Scheme which are common to each of the above Regulations are specified in the Public Employees (Contributory Retirement Scheme) (General) (Jersey) Regulations, 1989 (as amended) - known as the General Regulations.

The Career Average Scheme is governed by Regulations made under the Public Employees (Pensions) (Jersey) Law 2014 (as amended). At the valuation date, the provisions of the Career Average Scheme were specified in the:

• Public Employees (Pension Scheme) (Membership and Benefits) (Jersey) Regulations 2015

The following Regulations apply to both the Final Salary Scheme and the Career Average Scheme:

• Public Employees (Pension Scheme) (Administration) (Jersey) Regulations 2015

History of the Final Salary Scheme

All members joining the Final Salary Scheme after 30 August 1989 (1 January 1990 for former members of the Former Hospital Scheme) are subject to the New Members Regulations. However, members joining the Final Salary Scheme on or before that date were given the following options:

• Members who joined the Scheme prior to 1 January 1988 (1 January 1990 for former members of the Former Hospital Scheme) were given the option either to elect for benefits under the Existing Members Regulations or the New Members Regulations, or to remain subject to the 1967 Regulations (FHS Regulations for former members of the Former Hospital Scheme).

• New entrants to the Scheme between 1 January 1988 and 30 August 1989 inclusive had the choice of benefits under the Existing Members Regulations or the New Members Regulations.

• Special arrangements were made for employees who were not previously eligible for membership of either the Scheme or the Former Hospital Scheme (e.g. part-timers).

Main features

The main features of the Fund in force at the valuation date are summarised on the following pages where the term "uniformed" members includes members of the Police, Fire, Prison, Airport Fire Service, Port Control Unit, Air Traffic Control and Emergency Ambulance Services.

Main features of the Fund – the Final Salary Scheme

1967 or FHS Regulations Existing Members or New Members Regulations

Normal Retiring Age

"Uniformed" Members 55 or 60 as appropriate 55 or 60 as appropriate "Ordinary" Members 65 (males), 60 (females) 65

Note: Normal Retiring Age was increased to age 60 for prison officers with effect from 1 February 2013. The existing early retirement options were retained for those prison officers

employed before 1 February 2013.

Average Salary Average salary received during Salary received in best the 3 years prior to retirement successive 365 days during

the 3 years prior to retirement

Normal Retirement Pension

"Uniformed" Members 1/45th of average salary for Existing Members Regulations each year of reckonable 1/45th of average salary for

service each year of pensionable

Note: "Uniformed" members service cannot be subject to the FHS New Members Regulations Regulations 1/60th (or 1/70th for category C

prison officers) of average salary for each year of pensionable service

1967 or FHS Regulations Existing Members or New Members Regulations

"Ordinary" Members FHS Regulations (females) Existing Members Regulations 1/80th of average salary for 1/60th of average salary for

each year of reckonable each year of pensionable service service

1967 & FHS Regulations New Members Regulations (males) 1/80th of average salary for

1/60th of average salary for each year of pensionable

each year of reckonable service service

Cash at Retirement FHS Regulations (females) Option to exchange up to

A tax-free cash sum of 30% of commencing pension 3/80ths of average salary for for a tax free cash sum of

each year of reckonable £13.50 for each £1 of pension service given up.

1967 & FHS Regulations

(males)

Not available

Optional Retirement from Any time up to 5 years before Generally any time up to 5 active service normal retiring age subject to years before normal retiring

10 years' reckonable service age subject to 10 years' pensionable service, but in

Note: Under the FHS certain circumstances special

Regulations, the prior approval provisions apply

of the employer is required Ordinary members can retire after age 60 if they have

completed 2 years' qualifying

service.

Members who became Category A members on or

after 1 March 2009 may not
retire before age 55. Members who became Category A

members before 1 March 2009 who transfer in pension after that date cannot draw the transferred-in pension until

age 55.

Members first employed on or after 1 January 2006 who opt

to retire before normal retiring age will have their pension reduced by 2.4% for each

year the pension is being

taken early.

1967 or FHS Regulations Existing Members or New Members Regulations

Ill-Health Retirement Subject to 10 years' Subject to 2 years' qualifying reckonable service, immediate service, immediate benefits on

benefits on ground of serious grounds of serious ill health or ill health or incapacity. incapacity. Benefits based on

Benefits based on reckonable enhanced pensionable service

service up to date of in most cases retirement only

Death in Service 1. Cash sum – paid to spouse, 1. Cash sum – paid to spouse, child, dependant or estate child, dependant or estate

according to circumstances: according to circumstances:

Less than 5 years' a) Less than 5 years' qualifying

reckonable service: a refund service: a cash sum of 2/5ths of contributions with 3% p.a. of current salary for each year

interest** of service

At least 5 years' reckonable service: one year's current salary or a refund of contributions with 3% p.a.

interest**, whichever gives the

greater amount

** less 10%, being the tax levied by the Comptroller of Income Tax in regard to tax relief which may have been

enjoyed when the contributions were paid

2. Widow's Pension Subject to 10 years'

reckonable service: 50% of member's pension, based on

salary at death and reckonable service to normal retiring age

b) At least 5 years' qualifying service: a cash sum of twice

current salary

Spouse's Pension

(widow/widower/civil partner)

Subject to 2 years' qualifying service: 50% of member's pension, based on salary at

death and pensionable service

to normal retiring age

Dependant's Pension 3. Dependant's Pension None Subject to 2 years' qualifying service: an amount equal to a spouse's pension may be paid to an adult dependant (male or female) – except that no dependant's pension can be awarded where a spouse's pension is payable

1967 or FHS Regulations Existing Members or New Members Regulations

Children's Pension 4. Children's Pension Subject to 10 years' Subject to 2 years'

reckonable service: a flat rate qualifying service: a pension is allowance of £100 p.a. (1967 payable to each eligible child. Regulations) or £80 p.a. (FHS The total payable is restricted Regulations) per child, if there to the equivalent of the is a widow. If the spouse is spouse's pension, but no one also deceased, or on the child may receive more than

subsequent death of the half of that sum. The child's spouse, the allowance is pension is doubled if a

£150 p.a. (1967 Regulations) spouse's or dependant's or £110 p.a. (FHS Regulations) pension is not payable

per child

Death after Retirement 1. Widows Pension 1.Spouse's Pension From date of death, 50% (widow/widower/civil

of member's pension partner)

From date of death, 50%

of member's pension, ignoring any reduction for

lump sum taken at retirement.

Dependant's Pension 2. Dependant's Pension None An amount equal to a

spouse's pension may be paid to an adult dependant (male and female) – except that no dependant's pension can

be awarded where a spouse's pension is

payable

Children's Pension 3. Children's Pension

Provided retirement is due A pension is payable to to ill health: a flat rate each eligible child. The

allowance of £100 p.a. total payable is restricted (1967 Regulations) or to the equivalent of the £80 p.a. (FHS spouse's pension, but no

Regulations) per child, if one child may receive there is a widow. If the more than half that sum. spouse is also deceased, The child's pension is

or on the subsequent doubled if a spouse's or death of the spouse, the dependant's pension is not allowance is £150 p.a. payable (1967 Regulations) or

£110 p.a. (FHS

Regulations) per child

1967 or FHS Regulations Existing Members or New Members Regulations

Leaving Service Refund of contributions with Refund of contributions with

3% p.a. interest** 3% p.a. interest** (not

or available if joined after subject to 10 years' reckonable 1 August 2000 and left with 5

service and over age 50 (45 in or more years' qualifying the case of women and service)

"uniformed" members) a or deferred pension (and, for a deferred pension is payable

women under FHS at normal retiring age, or age Regulations, a deferred cash 60 if earlier than normal

sum) payable at normal retiring retiring age for joiners before

age 1 January 2006

or or

a transfer value payable to a a transfer value payable to a new employer's pension new employer's pension

scheme or to a personal scheme or to a personal pension scheme pension scheme

** less 10%, being the tax levied by the Comptroller of Income Tax in regard to tax relief which may have been enjoyed

when the contributions were paid

Voluntary Early Retirement Subject to being over age 55 (or 50 in special circumstances) and not being entitled to an immediate pension from the

Scheme: the employer may offer a supplementary pension, equal to the member's deferred pension entitlement (which may be enhanced), payable until the date the deferred pension is

due, provided that:

the member has volunteered to retire in consequence of abolition of office, or to make possible the continued

employment of another member of staff, or in the interests of

efficiency; and

the employer pays the capital cost of the supplementary pension to the Scheme

Additional Voluntary Contributions

Increases to Pensions

Not available (except under the FHS Regulations by certain

special arrangements made prior to 1 January 1990)

Annual increases in line with the Jersey RPI guaranteed by

the Government of Jersey (or

the member's former

employer).

The first increase will be proportionate to the period of

retirement in the first year

May be paid to purchase extra years of pensionable service

Annual increases in line with

the Jersey RPI, but not guaranteed where actuarial

review has disclosed the financial condition of the Scheme is no longer

satisfactory.

The first increase will be proportionate to the period of

retirement in the first year

1967 or FHS Regulations Existing Members or New Members Regulations

Notes Category A member means a front line officer of the

uniformed services such as the States of Jersey Police Force, the States of Jersey Fire and Rescue Service, the States of Jersey Prison Service, the States of Jersey Airport Rescue and Firefighting Service and the States of Jersey Ambulance Service.

• Category B member means a Chief Officer of the States of Jersey Police Force, the Prison Governor, the Chief Fire Officer, the Chief and Deputy Chief of the Airport Fire Service or the Chief or Assistant Chief Ambulance Officer or an Air Traffic Control Officer.

• Category C member means a prison officer whose employment in the prison service commenced on or after 1 February 2013.

Main features of the Fund – the Career Average Scheme

Normal Pension Age

"Uniformed" Members 60 "Ordinary" Members Jersey State Pension Age Pensionable Earnings Salary paid in a scheme year (including any pensionable

allowances)

Retirement Benefits 1/66th of pensionable earnings in a scheme year "Uniformed" and "Ordinary" Pension earned each year is revalued in service in line with Members Jersey RPI plus 1%

The accrual rate and rate of revaluation in service are subject to adjustment depending on the financial condition of the Scheme

Cash at Retirement Option to exchange up to 30% of commencing pension for a tax

free cash sum of £13.50 for each £1 of pension given up

Optional Retirement

"Uniformed" Members Any time up to 5 years before normal pension age provided the member has left scheme employment. Benefits at retirement are

actuarially reduced by a cost neutral amount

"Ordinary" Members Any time up to 10 years before normal pension age provided the member has left scheme employment Benefits at retirement are

actuarially reduced by a cost neutral amount

Ill-Health Retirement Subject to 2 years' pensionable service, immediate benefits without reduction on ground of ill-health or mental or physical

impairment An enhanced level of ill-health pension is provided to members unable to work in any other capacity

Where a member is determined as having less than 12 months to live then pension can be commuted for a lump sum equal to 30%

of pension x £13.50 plus 70% of pension x 5

Death in Scheme 1. Lump sum Employment 3 times the member's notional pensionable earnings

paid to the dependant, relative or nominated person

Partner's / Dependant's Pension

50% of prospective member pension, including Career Average

pension deemed to accrue over period to NPA

Children's Pension

A pension is payable to each eligible child. The total pension is restricted to the amount of the partner / dependant pension, but no one child may receive more than half that sum. The children's

pension is doubled if a partner's or dependant's pension is not payable.

Death in deferment or 1. Partner's / Dependant's Pension retirement 50% of member's pension benefits, ignoring any

adjustment for lump sum benefits taken

2. Children's Pension

A pension is payable to each eligible child. The total pension is restricted to the amount of the partner / dependant pension, but no one child may receive more than half that sum. The children's

pension is doubled if a partner's or dependant's pension is not payable

Leaving Service Refund of contributions (for members with less than 5

years service)

• deferred pension payable without reduction from normal pension age

• a transfer value payable to a new employer's pension scheme or to a personal pension scheme

Additional Voluntary Members may apply to enter into additional voluntary Contributions contribution arrangements to increase their normal retirement

benefits

Increases to Pensions Annual increases each 1 January in line with RPI (based on September RPI), subject to adjustment depending on the

financial condition of the Scheme

Contributions by Members Ordinary members 7.75% of pensionable earnings

Uniformed members 10.10% of pensionable earnings

Subject to adjustment depending on the financial condition of the Scheme

Contributions by Employers 16% of pensionable earnings

Subject to adjustment depending on the financial condition of the

Scheme

Appendix 3 – Membership data

Final Salary Scheme

Active members at 31 December 2024 (31 December 2021)

Active Number Average Total Average Average Members Age Salaries Salaries (£ Service

(£000 p.a.) p.a.) (years)

Men 2024 1,346 51.8 94,662 70,328 14.8

2021 1,772 50.3 99,284 56,029 15.5 Women 2024 1,730 52.2 95,987 55,484 11.6 2021 2,267 50.5 97,386 42,958 12.0

Total 2024 3,076 52.0 190,648 61,979 13.0 2021 4,039 50.4 196,670 48,693 13.5

Notes:

Active members' includes those transitional members who moved from the Final Salary Scheme to the Career Average Scheme on 1 January 2019 but retained a salary link to their Final Salary Scheme benefits. It is worth noting that some Final Salary Scheme members within 7 years of their normal retirement age (and some other members on historic benefit structures) were given the option to remain in the Final Salary Scheme and some chose to do so.
The average ages shown are unweighted.
Salary figures for the 2024 valuation include the 1 January 2025 increase that was granted and the 2021 salary figures include the 1 January 2022 increase.
The average salaries shown in the summary above are mean salaries. The median salary for active members at 31 December 2024 is £56,291 p.a. (£63,414 p.a. for males and £49,473 p.a. for females).
Average service includes service credits from transfers-in (but excludes added years arising from additional voluntary contributions).

Deferred pensioners at 31 December 2024 (31 December 2021)

Deferred Number Average age Total Average pensioners pensions pension

(£000 p.a.) (£ p.a.)

Men 2024 1,188 51.4 9,609 8,089 2021 1,173 49.8 7,679 6,546

Women 2024 2,263 51.5 11,341 5,011

2021 2,332 49.8 9,636 4,132 Total 2024 3,451 51.5 20,950 6,071

2021 3,505 49.8 17,314 4,940

Notes:

The average ages shown are unweighted.
The pension amounts shown above include pension increases up to and including the following 1 January (i.e. 1 January 2025 for the 2024 valuation).

Pensioners at 31 December 2024 (31 December 2021)

Pensioners Number Average age Total Average pensions pension

(£000 p.a.) (£ p.a.)

Men 2024 2,456 72.0 62,941 25,628 2021 2,338 71.4 51,027 21,825

Women 2024 2,879 71.7 30,903 10,734 2021 2,552 70.9 22,663 8,881

Dependants 2024 809 75.8 11,770 14,549

2021 733 74.7 8,324 11,356 Total 2024 6,144 72.3 105,614 17,190

2021 5,623 71.6 82,014 14,586

Notes:

The average ages shown are unweighted.
The pension amounts shown above include pension increases up to and including the following 1 January (i.e. 1 January 2025 for the 2024 valuation).
"Dependants" consists of spouses, civil partners, children and adult dependants in receipt of a pension.

Membership data: Career Average Scheme

Active members at 31 December 2024 (31 December 2021)

Active Number Average Total Average Average Members Age Salaries Salaries (£ Service

(£000 p.a.) p.a.) (years)

Men 2024 3,284 46.4 203,009 61,817 4.5 2021 2,839 46.0 146,514 51,608 2.8

Women 2024 5,158 45.4 260,311 50,468 4.3 2021 4,127 45.0 170,015 41,196 2.7

Total 2024 8,442 45.8 463,320 54,883 4.4 2021 6,966 45.4 316,529 45,439 2.8

Notes:

The average ages shown are unweighted.
Total salaries shown are actual salaries, i.e. not full-time equivalent salaries for part-timers. 2024 figures are pensionable earnings as at 1 January 2025 and 2021 figures are pensionable earnings in the year to 31 December 2021.
The average salaries shown in the summary above are mean salaries. The median salary for actives as at 1 January 2025 is £49,381 p.a. (£55,064 p.a. for males and £45,456 p.a. for females).
Average services includes service credits from transfers-in (but excludes added years arising from additional voluntary contributions).

Deferred pensioners at 31 December 2024 (31 December 2021)

Deferred Number Average age Total Average pensioners pensions pension

(£000 p.a.) (£ p.a.)

Men 2024 741 46.9 1,976 2,667 2021 384 45.3 524 1,364

Women 2024 1,192 46.4 2,279 1,912 2021 667 45.1 633 949

Total 2024 1,933 46.6 4,256 2,202 2021 1,051 45.1 1,156 1,100

Notes:

The average ages shown are unweighted.
The pension amounts shown above include pension increases up to and including the following 1 January (i.e. 1 January 2025 for the 2024 valuation).

Pensioners at 31 December 2024 (31 December 2021)

Pensioners Number Average age Total Average pensions pension

(£000 p.a.) (£ p.a.)

Men 2024 113 62.4 485 4,288 2021 31 59.3 69 2,219

Women 2024 116 63.1 325 2,801

2021 26 61.5 43 1,639 Dependants 2024 29 55.1 174 5,996

2021 5 58.9 18 3,511 Total 2024 258 61.9 983 3,811 2021 62 60.1 129 2,080

Notes:

The average ages shown are unweighted.
The pension amounts shown above include pension increases up to and including the following 1 January (i.e. 1 January 2025 for the 2024 valuation).
"Dependants" consists of spouses, civil partners, children and adult dependants in receipt of a pension.

Appendix 4 – Rationale for best-estimate assumptions for Final Salary Scheme

Best-estimate assumptions for the Final Salary Scheme

Following advice from ourselves, the Committee of Management has confirmed that the assumptions adopted to determine the liabilities for the Final Salary Scheme should be best-estimate assumptions. The rationale for using best-estimate assumptions for the Final Salary Scheme is discussed below.

(Note: Best-estimate assumptions cannot be used to determine the liabilities for the Career Average Scheme as the Fund Regulations provide that the assumptions used for the Career Average Scheme must be prudent, i.e. cautious.)

Range of assumptions

The results of a valuation are sensitive to the assumptions made and therefore the choice of appropriate assumptions is important.

There is a wide range of assumptions that could be used ranging from optimistic, through best estimate to cautious:

• Under optimistic assumptions the future outcome is more likely to be worse than assumed;

• Under cautious assumptions the future outcome is more likely to be better than assumed;

• Under best estimate assumptions the future outcome is just as likely to be better or worse than assumed.

The Committee of Management has a duty to protect members' benefits. Therefore it would not be appropriate to use optimistic assumptions when determining the adequacy or otherwise of the assets to support the benefits payable under the Scheme.

This leaves a choice of assumptions in the range from best estimate to cautious. The more cautious the valuation assumptions, the greater the valuation liabilities will be and consequently the greater the possibility of members' benefits or future pension increases having to be cut back (or members' or employers' contributions having to be increased within the contribution cap) if there is a deficiency.

Advantages of using best-estimate assumptions (and disadvantages of using more cautious assumptions)

The advantage of using best estimate assumptions is that it complies with the principle of only cutting back on the members' pensions where this appears genuinely necessary.

Using more cautious assumptions could lead to a larger deficiency (or to a deficiency which would otherwise not exist), which may potentially trigger reductions to benefits or future pension increases (or increases to members' or employers' contributions within the contribution cap). In the long term, given the extra returns targeted under the Scheme's investment strategy, there would be a more than 50% probability that experience would prove more favourable than assumed, leading to surpluses at later valuations. Therefore, using more cautious assumptions may result in cutting back benefits (or increasing contributions) in a way that with hindsight was unnecessary, which may impact unfairly on certain generations of member.

Disadvantages of using best-estimate assumptions (and advantages of using more cautious assumptions)

The disadvantage of using best estimate assumptions is that it leads to a larger chance of actual scheme experience being worse than assumed than if more cautious assumptions are used. This increases the likelihood of deficiencies arising at later valuations which have to be dealt with through future reductions in benefits, or by increasing members' or employers' contributions. If experience is adverse, the reductions in benefits (or increases in contribution) eventually required may need to be bigger at that time than if they had been made earlier (and therefore impacting disproportionately on a later "generation" of members). Although there is no provision in the Regulations for the Scheme to be discontinued, this could be particularly problematic if the Scheme were discontinued (e.g. following a deterioration in the Government of Jersey's financial strength). Significant benefit reductions may be required in this situation.

Recommendation

Following advice from ourselves, the Committee of Management has confirmed that the assumptions used to determine the liabilities for the Final Salary Scheme should be best- estimate because:

• It complies with the principle of only cutting back on members' pensions where this appears genuinely necessary, and

• The Committee of Management does not consider the risks that the financial strength/commitment of the Government of Jersey might deteriorate are sufficient to warrant the use of more cautious assumptions.

Appendix 5 – Valuation method

Valuation method

The valuation method for the valuation calculations is known as the "projected unit" method.

Under the projected unit method, the funding position in relation to service up to the valuation date is considered separately from the position relating to service after the valuation date. For both past and future service, allowance is made for projected future increases to pay through to retirement or date of leaving service. If there are no new members, the average age of the membership is expected to increase over time and the future service contribution rate under the projected unit method can be expected to rise.

For the Final Salary Scheme, the cost of future service benefits is assessed over a three year control period to take broad account of the expected ageing of the membership over the period to the next valuation. A one year control period is appropriate for the Career Average Scheme as it is not closed to new entrants. This approach is set out in the Funding Strategy Statement.

For the Final Salary Scheme, the value of the Scheme's existing assets includes the present value of the future pre-1987 debt repayments (assumed to be paid by the applicable Admitted Body employers over the long-term period specified in the Actuary's contribution certificate). This approach involves taking credit for all future pre-1987 debt repayments.

Value of liabilities and future contributions

To calculate "the value" of the benefits payable we use our assumptions to estimate the payments which will be made from the Fund throughout the future lifetimes of current active members, pensioners, deferred pensioners and their dependants. We then calculate the amount of money which, if invested now, would be sufficient to make these payments in future, using our assumptions about investment returns. The same technique is adopted to value future contributions to the Fund.

Value of assets

We have taken the assets into account at their market value.

Appendix 6 – Financial assumptions

Introduction

In this appendix we describe the financial assumptions. The financial assumptions that have been chosen are consistent with the funding target. For the Final Salary Scheme, each assumption is intended to represent a reasonable best-estimate of the future. For the Career Average Scheme, all assumptions other than the discount rate are best- estimate assumptions.

When assessing a set of financial assumptions, greater importance should be attached to the relative differences between the assumptions, rather than to the individual assumptions in isolation. This is because the differences have a greater effect on the results of the valuation than the absolute values of each assumption.

Discount rate (investment return)

The most important individual assumption in terms of its impact on the overall valuation results is the choice of discount rate, i.e. assumed future investment returns. The discount rate is used to value payments due out of the Fund (benefit payments) and into the Fund (future contributions and pre-1987 debt repayment instalments).

For valuing the liabilities, an assumption which could be described as "low risk" would be to discount future benefit payments at the market yields available on index-linked gilts at the valuation date. This approach recognises that a broadly matching asset for the Fund's cash flows is obtained by investing in index-linked gilts of appropriate term.

It is common for UK occupational schemes to adopt a funding target which incorporates a higher discount rate than the returns available on gilts. The consequence of using a higher discount rate is that a lower funding target is adopted.

Final Salary Scheme

The funding target adopted for the Final Salary Scheme requires that the assumptions chosen should be reasonable best-estimates. In principle, we need to set the discount rate at this valuation by considering the best-estimate returns available on the Fund's strategic asset allocation, over the period starting now and ending in the long-term future. The expected returns depend critically on what asset classes are assumed to be held, both now and in the future.

The discount rate structure adopted for the Final Salary Scheme valuation is as follows:

• The initial discount rate is equal to a best-estimate investment return over 10 years from the valuation date based on the assumed strategic asset allocation as set out in the Statement of Investment Principles dated 30 January 2026.

• The initial discount rate is then assumed to reduce in steps every 3 years (consistent with the investment strategy being reviewed in conjunction with triennial actuarial valuations) to achieve a gradual move towards a longer-term investment strategy suitable for supporting pensioner liabilities by 2034 as the scheme matures.

• The long-term discount rate is then equal to the best-estimate return over 10 years from the valuation date based on the assumed long-term investment strategy. This discount rate applies from 2034 onwards.

This reflects a change in approach compared with that adopted for the previous valuation. Based on the approach outlined above, we have assumed a discount rate equal to:

• 5.80% p.a. for the 3 years to 31 December 2027;

• 5.65% p.a. for the 3 years to 31 December 2030;

• 5.50% p.a. for the 3 years to 31 December 2033; and

• 5.35% p.a. thereafter.

Career Average Scheme

The Funding Strategy Statement states that the discount rate for the Career Average Scheme will be determined such that the probability of the actual investment return on the Career Average Scheme assets being higher than the discount rate over the 30-year period from the valuation date is at least 60%.

For this valuation it has been agreed that the discount rate should be set such that the probability of the actual investment return being higher than the discount rate is equal to 80%.

Based on our best-estimate (median) investment return over the 30 years from the valuation date and reflecting the Career Average Scheme strategic investment benchmark as set out in the Statement of Investment Principles dated 30 January 2026, we have assumed a discount rate of 5.80% p.a..

Increases to pensions in payment and deferred pensions

The Fund provides for annual increases to pensions in payment and deferred pensions in line with increases in the Jersey RPI.

In light of the proposed changes to the calculation methodology for UK RPI from 2030, and consistent with the approach adopted for the 2021 valuation, we have determined the Jersey RPI assumption relative to our best-estimate for UK CPI.

The Jersey and UK economies have a tied currency and the same interest rates and so over the medium to long term, underlying Jersey inflation can be expected to be fairly close to UK inflation. However, although the methodology used for calculating UK CPI is similar to the methodology used for calculating Jersey RPI, there are differences between the constituents used and their respective weightings. This, together with differences in supply and demand, can lead to long-term differences between UK CPI and Jersey RPI.

Recent experience shows that Jersey RPI has generally been higher than UK CPI and we have seen a sustained period where the difference has been higher than the 0.6% assumed for the 2021 valuation. The average difference over the last 10 years has been 0.9% p.a..

Reflecting more recent and long-term experience, we have assumed Jersey RPI is equal to UK CPI plus 0.75% p.a.. Aon's best-estimate of UK CPI over the long-term period consistent with the duration of the liabilities is 2.1% p.a.. and so the Jersey RPI assumption has been set equal 2.85% p.a..

We have also allowed for the fact that there is a floor of 0% on the Jersey RPI inflation used in determining the assumption for pension increases in deferment and in payment. Allowing for the possibility of negative Jersey RPI based on a best-estimate of the variation in inflation from year to year gives an assumption for pension increases in deferment and in payment of 2.9% p.a..

General salary increases

In recent years, pay awards for Fund members have generally been close to or below Jersey RPI.

Given the sustained recent experience of low salary increases (relative to inflation), we have continued to assume general salary inflation equal to 0.5% p.a. above Jersey RPI, resulting in an assumption of 3.35% p.a..

Promotional salary increases

In addition to the allowance for general salary increases, an explicit age-related promotional scale was adopted at the 2021 valuation (the same scale for males as for females).

Based on our analysis of the Final Salary Scheme experience over the period

1 January 2022 to 31 December 2024 we observed that promotional increases have been above those assumed and so a higher allowance for promotional increases has been made at this valuation.

The allowance included for promotional salary increases (in addition to general salary increases) at specimen ages is:

Age Promotional Salary Increases 30 3.0% 40 2.5% 50 1.9% 60 0.6% 65 0.0%

Expenses

For the 2021 valuation, it was assumed that future ongoing administrative expenses (excluding investment management expenses) would be, on average, 0.7% of pensionable earnings and this was allowed for in the valuation by adding this figure into the cost of future benefit accrual in both the Final Salary Scheme and the Career Average Scheme.

In light of the maturing of the Final Salary Scheme, an expense reserve has been introduced at this valuation equal to 2% of the Final Salary Scheme's benefit liabilities to cover the ongoing administrative expenses (excluding investment management expenses) estimated to be incurred over the future lifetime of the Final Salary Scheme.

We have separately considered the level of Career Average Scheme ongoing administrative expenses (excluding investment-related expenses) over the last 6 years, covering the period from 2019 to 2024. In light of this, we have assumed Career Average Scheme expenses are 0.4% of pensionable earnings and this is included within the cost of future benefit accrual under the Career Average Scheme.

Appendix 7 – Demographic assumptions

Introduction

In this appendix, the demographic assumptions are described and we comment on how they compare with actual experience. The demographic assumptions that have been chosen are consistent with the funding target set out in the "Valuation approach" section of this report and each assumption is intended to represent a reasonable best-estimate of the future.

Mortality rates before retirement

We have considered experience over the period from 1 January 2022 to 31 December 2024 and compared the actual rates of mortality to the expected rates of mortality based on the tables used for the 2021 valuation, which were 70% of the standard tables AMC00 for males and AFC00 for females.

The Final Salary Scheme and Career Average Scheme experience shows there have only been 39 deaths before retirement.

In the absence of any statistically credible data and due to the fact that this assumption has a minimal impact on the liabilities, we have retained the assumptions used for the 2021 valuation.

Mortality rates after retirement – current mortality rates

We have analysed the mortality experience of the Final Salary Scheme over the twelve year period from 1 January 2013 to 31 December 2024.

The 2021 valuation assumed that mortality would be in line with the S3 "All lives" tables with a scaling factor of 110% for males and 105% for females.

Taking account of experience over the twelve year period, for the 2024 valuation, we have updated to the latest tables and assumed current mortality rates in line with the SAPS S4 "All lives" tables (S4PXA) with 105% and 100% scaling factors for males and females respectively.

For males and females, this represents slightly heavier mortality than assumed in the 2021 valuation, to reflect the heavier mortality (higher death rates) experienced over the analysis period.

Taking into account the nature of the workforce, we believe that these are reasonable best-estimate assumptions.

Mortality rates after retirement – allowance for future improvements

It is not straightforward to make an assumption about future rates of mortality improvement. In forming a best-estimate assumption, we believe it is appropriate to have regard to:

• Current trends;

• Long-term trends;

• Observed generational differences, which suggest faster improvements within certain generations of pensioner (known as the cohort effect); and

• The outlook for future medical advances.

However, the allowance made must inevitably be subjective.

In determining an allowance for future improvements in life expectancy, it makes sense to consider the near future and longer term separately:

• Recent improvements in life expectancy are likely to be the best guide for what will happen in the near future and so improvements in the near future are best modelled by continuing recent trends.

• The forces driving longer term improvements may be very different to those behind recent improvements. This means that the assumption for long-term improvements is more subjective and should take into account analysis of historic long-term rates of improvements (and what has caused them) as well as opinions on what might happen in the future.

In November 2009, the Continuous Mortality Investigation (CMI), a group set up by the UK Actuarial Profession, published its Mortality Projections Model. The model uses complex methods for taking recent rates of mortality improvements and blending these

to the long-term rate of improvements. The latest annual update to the model available at the time of producing these valuation results, the CMI_2023' model, was published in April 2024. Projections from this version of the CMI's model are known as the 'CMI_2023' projections. Apart from the long-term rate of improvements, the CMI has provided default values for the model inputs such as the smoothing parameter (S) and the initial addition to mortality (A) and the weight parameters (w), which are known as the Core Projections'.

Aon's analysis suggests that future long-term improvements in mortality rates have reduced since the 2021 valuation, with a reasonable best-estimate range being between 0.75% p.a. and 1.75% p.a. for both men and women (compared to a range of 1.00% p.a. and 2.00% for both men and women previously).

We have therefore assumed future improvements in mortality rates in line with the CMI_2023 Core Projections model with S=7.0, A=0.5%, core weight parameters and a long-term rate of improvement of 1.25% p.a..

Retirement in normal health

Final Salary Scheme

We have assumed that active members will retire at the ages set out in the following table:

Membership category

Category A Uniformed members (male & female)

Category B and C Uniformed members (male & female)

Non-Uniformed male members

Non-Uniformed female members:

• Existing and New Members Regulations

• 1967 and Former Hospital Scheme regulations

Normal retiring age Assumed age at retirement

55 53* 60 58 65 63 65 63 60 59

*Except post 1 March 2009 entrants to Category A status who were assumed to retire at age 55.

The analysis of the retirement experience over the period 1 January 2022 to

31 December 2024 for the uniformed membership categories shows the average retirement ages over the period were slightly higher than expected for Category A members. However, since there were only a relatively small number of retirements, we have retained the current assumed average retirement ages for the 2021 valuation.

There is currently no experience data for Category B and Category C members. These members have an NRA of 60 and an early retirement of 2.4% p.a. is applied on retirement from active service before NRA. In the absence of any data, we have continued the approach of assuming these members retire from active service at age 58. This assumption has a minimal effect on the valuation results.

For non-uniformed members (excluding females who fall under the 1967 and Former Hospital Scheme Regulations) recent experience shows that while recent retirements have retired slightly later than the average age 63, the longer-term experience suggests the assumed retirement age of 63 (as adopted for the 2021 valuation) remains reasonable.

There has been only 1 retirement of Non-Uniformed females who fall under the 1967 and Former Hospital Scheme Regulations; we have therefore retained the current assumed average retirement age of 59 for the current valuation.

Career Average Scheme

We have assumed that all the Career Average Scheme members retire at Normal Retirement Age.

There is a growing pool of retirement experience that could be analysed but it remains limited. We believe that the extent to which Career Average Scheme members take their pension early or late will not have a material impact on the valuation results due to the cost-neutral adjustment applied in determining their pension on early or late retirement.

Retirement in ill-health

Final Salary Scheme

In light of the reducing Final Salary Scheme retirement experience and growing Career Average Scheme retirement experience, our analysis has focussed on the Career Average Scheme experience with consistent assumptions adopted between the two schemes.

Career Average Scheme

Over the period 1 January 2022 to 31 December 2024, the overall levels of ill-health retirement across the Non-Uniformed membership have been lower than those implied by the assumptions adopted for the previous valuation. We have therefore reduced the 2021 valuation assumed rates of retirement for Non-Uniformed members by 20% for this valuation.

The analysis for the Uniformed membership categories remains limited given the small number of ill-health retirements over the analysis period. We have therefore retained the allowance from the 2021 valuation for ill-health retirement of Uniformed members.

Of the 39 ill-health retirements observed from the Career Average Scheme, 20 received additional pension benefits due to being unable to work in any other capacity. We therefore have continued to assume that 50% of retirements will be unable to work in any other capacity (and so will receive additional Career Average pension as set out in the Regulations).

Specimen rates (per 1000 members) of retirement due to ill-health assumed at this valuation are set out below

Age Number leaving service each year per thousand members at age

last birthday as shown

Uniformed members Non-Uniformed members 30 1.30 0.31 40 2.30 0.57 50 7.56 1.89 55 13.50 3.37 60 21.00 5.25

Allowance for commutation

Final Salary Scheme

Certain members of the Final Salary Scheme can commute up to 30% of their pension for a lump sum payment at retirement.

The 2021 valuation assumed that members commute 20% of pension on retirement.

The average proportion of Final Salary Scheme pension commuted from 1 January 2022 to 31 December 2024 has been lower than expected based on the 2021 valuation assumption.

Having regard to the recent experience, we have reduced the assumption for commutation so that members under the Existing Members Regulations and the New Members Regulations are assumed to commute 19% of their pension on retirement.

Career Average Scheme

Career Average Scheme members can also commute up to 30% of their pension for a lump sum payment at retirement.

In the absence of any statistically credible data, the 2021 valuation assumed that Career Average Scheme members would commute in line with those members eligible to do so in the Final Salary Scheme. That is, Career Average Scheme members were assumed to commute 20% of their pension at retirement.

The average proportion of Career Average Scheme pension commuted from 1 January 2022 to 31 December 2024 was broadly in line with that expected based on the 2021 valuation assumption. However, experience from 1 January 2019 to 31 December 2024 across both Schemes shows average commutation rates of around 19%.

Having regard to this experience, we have reduced the assumption for commutation so that Career Average Scheme members are assumed to commute 19% of their pension on retirement.

Withdrawal rates

In light of the reducing Final Salary Scheme membership and increasing Career Average Scheme membership, we have only analysed the withdrawal experience of the Career Average Scheme members (including transitional members who also have benefits in the Final Salary Scheme).

For non-Uniformed members, over the period from 1 January 2022 to 31 December 2024, the actual level of male withdrawals was higher at all ages and the actual level of female withdrawals was broadly in line with what was expected at younger ages (those below age 40) and slightly higher than expected for older ages (those above age 40). We have therefore increased the male withdrawal assumption at all ages but we have retained the female withdrawal assumption as per the 2021 valuation.

Uniformed members also exhibited a continued trend of higher than expected withdrawals and we have therefore increased the allowance for uniformed members withdrawing at ages 35 and above.

Specimen percentage rates of withdrawal assumed at this valuation are as follows:

Final Salary Scheme

Age Uniformed members Non-Uniformed members

Men Women Men Women 30 3.29 3.75 10.26 11.25 35 2.13 2.81 6.66 8.44 40 2.13 2.81 3.85 5.63 49 2.13 2.81 3.51 2.81 50 0.00 0.00 3.51 2.81 59 0.00 0.00 3.51 2.81 60 0.00 0.00 0.00 0.00

Career Average Scheme

Age Uniformed members Non-Uniformed members

Men Women Men Women 30 3.29 3.75 10.26 11.25 35 2.13 2.81 6.66 8.44 40 2.13 2.81 3.85 5.63 45 2.13 2.81 3.51 2.81 50 2.13 2.81 3.51 2.81 59 2.13 2.81 3.51 2.81 60 0.00 0.00 3.51 2.81

Note: For the Career Average Scheme, the Non-Uniformed withdrawal assumption continues at a rate of 3.51 (per 100 members) for males and 2.81 (per 100 members) for females to NPA.

Family assumptions

Family assumptions cover:

• the proportions of deaths of members and pensioners which give rise to a spouse's, civil partner's or dependant's pension;

• the age difference between the member and spouse/dependant at date of death; and

• the allowance for children's pensions.

There is not sufficient data to carry out a detailed analysis by age of the proportion of cases which give rise to a spouse's/dependant's pension but we have reviewed the assumptions having regard to:

• Office for National Statistics data on expected proportions of people married (or having a dependant) in the UK population, both now and in the future;

• Other UK government data on the extent to which economically active individuals are more likely to be married;

• Analysis of data relating to in pension schemes; and

• The definition of "dependant" for each Scheme.

Taking account of the above factors, we have retained the assumptions used for the 2021 valuation as follows:

• The proportion married assumption at age 63 and NPA (or earlier death) for the Final Salary Scheme and Career Average Scheme respectively, reducing thereafter in line with spouse's mortality, is as follows:

Scheme Males Females

Non- Non - Pensioners Pensioners

Pensioners Pensioners

Final Salary 85% 77.5% 60% 62.5% Career Average 90% 87.5% 67.5% 75%

• Male members are assumed to be 3 years older than their spouse/dependant and female members are assumed to be 1 year younger than their spouse/dependant.

• An allowance for children's pensions is made via a loading of 10% to the liability for spouses' pensions on death before retirement in the Existing and New Members Regulations of the Final Salary Scheme and in the Career Average Scheme.

Appendix 8 – Summary of assumptions

Financial assumptions

Assumption

Discount rate for Final Salary Scheme

Discount rate for Career Average Scheme

Jersey RPI inflation

Rate of pension and deferred pension increases

Revaluations in service for Career Average Scheme

Rate of general salary increases

2021 valuation

4.35% p.a. over the period to 31 December 2031,

reducing to 3.1% p.a. with effect from 1 January 2032

4.4% p.a.

2.85% p.a.
i.e. UK CPI inflation plus 0.6% p.a.

2.85% p.a. 3.85% p.a.

3.35% p.a.
i.e. Jersey RPI

plus 0.5% p.a.

2024 valuation

5.80% p.a. for the 3 years

to 31 December 2027;

5.65% p.a. for the 3 years

to 31 December 2030;

5.50% p.a. for the 3 years to 31 December 2033; and 5.35% p.a. thereafter

5.8% p.a.

2.85% p.a.
i.e. UK CPI inflation plus 0.75% p.a.

2.9% p.a. 3.9% p.a.

3.35% p.a.
i.e. Jersey RPI

plus 0.5% p.a.

plus promotional increases plus promotional increases

Expenses 0.7% of pensionable 2% of liabilities for Final earnings added to cost of Salary Scheme

benefit accrual 0.4% of pensionable

earnings added to cost of future benefit accrual for

Career Average Scheme

Demographic assumptions

Assumption

Pre-retirement mortality Post-retirement mortality

Withdrawals Early Retirements

Commutation Family details

2024 valuation

Males: 70% of standard table AMC00 Females: 70% of standard table AFC00

SAPS S4' "All lives" tables with 105% and 100% scaling factors

for males and females respectively

Improvements from 2017 are assumed to be in line with the CMI_2023 projections model with Sk=7.0, A=0.5%, core weight

parameters and a long-term rate of future improvements in mortality of 1.25% p.a.

Allowance is made for withdrawals from service in line with a bespoke withdrawal table (see sample rates in Appendix 7)

Allowance has been made for Final Salary Scheme active members to retire before Normal Retiring Age in normal health

and in ill-health (see sample rates in Appendix 7)

Deferred members are assumed to retire at the earliest age at

which they can retire with unreduced benefits

Final Salary Scheme members under the Existing Members Regulations and New Members Regulations, and Career

Average Scheme members, are assumed to commute 19% of

their pension on retirement

Final Salary Scheme 85% of male pensioners and 60% of female pensioners are

assumed to be married at retirement or earlier death (reducing

thereafter in line with spouse's mortality rates)

77.5% of male non-pensioners and 62.5% of female non- pensioners are assumed to be married at retirement or earlier death (reducing thereafter in line with spouse's mortality rates)

Male members are assumed to be 3 years older than their spouse/dependant and female members 1 year younger than

their spouse/dependant

10% loading to spouses' pensions on death before retirement to allow for children's pensions

Career Average Scheme

As per the Final Salary Scheme with the exception of the

proportion married assumption which is as follows:

90% of male pensioners and 67.5% of female pensioners are assumed to be married at retirement (reducing thereafter in line

with spouse's mortality rates)

87.5% of male non-pensioners and 75% of female non- pensioners are assumed to be married at retirement (reducing

thereafter in line with spouse's mortality rates)

Appendix 9 – Discontinuance test

In line with previous valuations, we have considered the financial position of the Fund on an approximate basis in the hypothetical scenario of discontinuance.

Even though the Regulations governing the Fund do not envisage the Fund's discontinuance (i.e. the future accrual of benefits and payment of contributions into the Fund being discontinued), it is our practice at valuations also to review what the financial position of the Fund would have been had discontinuance occurred on the valuation date. This is done by comparing the value of the basic accrued benefits as at

31 December 2024 with the value of the Fund's existing assets at that date.

By basic accrued benefits we mean:

• benefits in respect of current pensioners and their spouses and dependants;

• retirement and death benefits in respect of former employees entitled to deferred pensions;

• accrued retirement and death benefits in respect of current members based on pensionable pay at 31 December 2024, no allowance being made for pay increases after that date.

We have taken the value of the basic accrued benefits on discontinuance at the valuation date as an estimate of the terms that might be offered by insurance companies for determining the cost of immediate and deferred annuities, plus a provision to cover expenses.

In practice, if the Fund were ever to be discontinued, it is possible that the Fund would continue as a closed fund.

Future pension increases

The Regulations governing the Fund provide for annual increases in line with the Jersey RPI at present, although lower increases may be paid where an actuarial review has disclosed that the financial condition of the Fund is no longer satisfactory. We have assumed that in a discontinuance situation the pension increases provided would be

equal to the minimum increases specified in the Regulations, i.e. nil increases for the Final Salary Scheme benefits and 50% of Jersey RPI for the Career Average Scheme benefits.

For the Career Average Scheme benefits, we have assumed that increases based on 50% of the UK RPI would be provided. The reason we have not made allowance for increases in line with 50% of the Jersey RPI is that, based on the principles an insurer might use, these would be, at best, extremely expensive, and at worst, impossible to reserve for, as there are no available assets that we are aware of which match the increases in the Jersey RPI. Therefore, it is unlikely to be possible to purchase annuities based on such increases in the market.

However, we have also estimated the discontinuance funding ratio assuming full pension increases in line with inflation were provided. In estimating this, we have assumed that increases based on UK RPI would be provided (we have used UK RPI rather than Jersey RPI for the reasons outlined above).

Derivation of assumptions

In setting the assumptions for the discontinuance test we have taken into account actual buy-out terms available in the market at the valuation date. However, we have not carried out a detailed analysis of the cost of risks that might apply specifically to the Fund and so our estimate is only a guide. Market changes to both interest rates, and demand and supply for this type of business, mean that no reliable estimate can be made, and that ultimately the actual true position can only be established by completing a buy-out.

We have set the discount rate for this estimate equal to Aon's Bulk Annuity Market Monitor curves for pensioners and future pensioners.

The assumption for increase in UK RPI reflects term-dependent rates derived from the RPI swap markets. Members are assumed to immediately withdraw from service with entitlement to deferred pension and no allowance is made for commutation. The mortality assumption is as for the main valuation basis except that the long-term rate of future improvements in mortality is assumed to be 1.5% p.a..

Expenses

The reserve for expenses allows for deductions to allow for the cost of forced sales of equity, bond and property holdings, an allowance for the management expenses associated with winding up the Fund, and an estimate of the per member charges expected to be levied by an insurance company on buy-out.

Discontinuance test results

The discontinuance funding ratio (i.e. assets as a percentage of the value of the accrued benefits as described above) at 31 December 2024 differs depending on the allowance for future pension increases, as follows:

• 149% (154% for the Final Salary Scheme and 129% for the Career Average Scheme) based on minimum pension increases; and

• of the order of 89% (89% for the Final Salary Scheme and 90% for the Career Average Scheme) if pension increases in line with UK RPI were provided.

The smaller difference in funding ratio for the Career Average Scheme (compared with the Final Salary Scheme) when comparing the position based on minimum pension increases to the position based on pension increases in line with UK RPI is due to the higher level of minimum pension increases in the Career Average Scheme.

Comparison with discontinuance funding ratio at previous valuation

The discontinuance funding ratio at the 2021 valuation was 97% based on minimum pension increases.

Appendix 10 – Rates and adjustments certificate

In accordance with Regulation 3(1)(c) of the Funding and Valuation Regulations, this certificate specifies any adjustments required to benefits and contributions in the Public Employees Pension Scheme (the Career Average Scheme) and the Public Employees Contributory Retirement Scheme (the Final Salary Scheme) arising from the valuation as at 31 December 2024.

In determining whether any adjustments are required, we have used the method and assumptions detailed in our actuarial valuation report dated 23 March 2026 and the Funding Strategy Statement dated 13 March 2026.

Employer and member contribution rates

The employer and member contribution rates to be paid from 1 June 2026 until completion of the next valuation are as follows.

• For both the Career Average Scheme and the Final Salary Scheme:

member contributions equal to 6.77% of pensionable earnings for Ordinary members and 8.82% of pensionable earnings for Uniformed members;

employer contributions equal to 13.8% of pensionable earnings.

Contributions up to 31 May 2026 will continue to be paid in accordance with the rates and adjustments certificate dated 28 February 2023.

In accordance with the Funding Strategy Statement, some of the contributions paid in respect of members of the Career Average Scheme will be allocated to the Final Salary Scheme in order to cover transition costs. The amount of contributions which shall be allocated to the Final Salary Scheme rather than the Career Average Scheme from

1 January 2025 is:

• 5.9% for the period from 1 January 2025 to 31 December 2025;

• 7.8% for the period from 1 January 2026 to 31 May 2026;

• 11.0% for the period from 1 June 2026;

of the pensionable earnings of members accruing benefits in the Final Salary Scheme plus, for the period to 31 December 2032, £840,000 per year.

Regulation 3(7) requires a "primary rate" and "secondary rate" of employer and member contributions to be specified in this certificate. Such rates below have been calculated in accordance with this Regulation and the Funding Strategy Statement, but do not affect the contributions that should actually be paid.

For the Career Average Scheme, the primary rate of employer and member contributions to fund the cost of future accrual of benefits for the active members of that scheme (including allowance for expenses) was 17.9% of pensionable earnings at the valuation date. No additional contributions are required to meet the costs referred to in Regulation 3(7)(b) so the secondary rate defined in the regulations is nil.

For the Final Salary Scheme, the primary rate of employer and member contributions to meet the cost of future accrual of benefits for the active members of that scheme (including allowance for expenses) was 31.7% of pensionable earnings at the valuation date. No additional contributions are required to meet the costs referred to in Regulation 3(7)(b) so the secondary rate defined in the regulations is nil.

Rates of annual pension increase

Both for Career Average Scheme and Final Salary Scheme members, the rates of annual pension increase to be applied on each 1 January until completion of the next valuation will be equal to 100% of the rate of increase (if any) in the All Items Retail Price s Index for Jersey as recorded over the year to September of the year preceding the date of increase.

Proportionate increases will be applied where applicable, in accordance with the relevant regulations.

Accrual rate under the Career Average Scheme

The accrual rate in the Career Average Scheme until completion of the next valuation will be equal to 1/66th.

Revaluation rate under the Career Average Scheme

The revaluation rate in the Career Average Scheme until completion of the next valuation will be equal to 100% of (Jersey RPI plus 1%) where Jersey RPI is the rate of increase (if any) in the All Items Retail Price s Index for Jersey as recorded over the year to the September of the year preceding the date of increase.

For Aon Solutions UK Limited

Jonathan Teasdale FIA C.Act Date: Mar 23, 2026

Glossary

Discount rate

This is used to place a present value on a future payment. A 'risk-free' discount rate is usually derived from the investment return achievable by investing in government gilt- edged stock. A discount rate higher than the 'risk-free' rate is often used to allow for some of the extra investment return that is expected by investing in assets other than gilts.

Funding ratio

This is the ratio of the resources of the relevant scheme (its assets, plus the value of the future pre-1987 debt repayments for the Final Salary Scheme) to the resources that would be required to meet its funding target.

Funding target

This is that the assets should be sufficient over the long term to support the benefits payable from the Fund in respect of the current members of the Fund based on pensionable service prior to the valuation date, including full future indexation in line with the Jersey RPI (or Jersey RPI + 1% for annual revaluation in service of Career Average Scheme members' accounts) i.e. the assets should be sufficient to cover the liabilities in respect of service up to the valuation date.

Liabilities

This is the present value of the benefits members are entitled to, as assessed using the agreed assumptions, allowing for full future indexation in line with the Jersey RPI (or Jersey RPI + 1% for annual revaluation in service of Career Average Scheme members' accounts) and projected future increases to pay through to retirement or date of leaving service for Final Salary Scheme benefits.

Present value

Actuarial valuations involve projections of pay, pensions and other benefits into the future. To express the value of the projected benefits in terms of a cash amount at the valuation date, the projected amounts are discounted back to the valuation date by a discount rate. This value is known as the present value. For example, if the discount rate was 6% a year and if we had to pay a lump sum of £1,060 in one year's time the present value would be £1,000.

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Aon Solutions UK Limited. Registered in England & Wales No. 4396810. Registered office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London, EC3V 4AN.

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