Sainsbury's defined benefit (DB) pension surplus rose to £731m as at 1 March 2025, marking a £41m increase from the prior year-end date of 2 March 2024, its latest financial accounts have revealed.

According to the group, the primary driver of this increase was changes in financial assumptions, specifically an increase in the discount rate from 5 per cent per annum to 5.45 per cent per annum, which led to a decrease in scheme liabilities.

However, this decrease in scheme liabilities was broadly offset by a reduction in the value of matching assets used to hedge against movements in gilt yields and inflation.

The group also revealed that the IAS 19 pension income decreased to £28m down from £44m in 2023/24, primarily driven by the impact of the lower opening surplus at the beginning of the financial year compared to the prior year.

While the accounts revealed that the group made pension scheme contributions totalling £45m in 2024/25, which is in line with the prior year, this is expected to drop going forward, as the total DB pension scheme contributions for 2025/26 are expected to be £26m.

An updated triennial funding valuation of the scheme is currently being carried out with an effective date of 30 September 2024.

The Sainsbury's Pension Scheme has two sections, the Sainsbury's Section, which holds the assets and liabilities of the original Sainsbury's Pension Scheme, and the Argos Section, which holds the assets and liabilities of the former Home Retail Group Pension Scheme.

Each section's assets are segregated by deed and ring-fenced for the benefit of the members of that section. The scheme is run by a corporate trustee with nine directors.

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