The valuation of Saga’s defined benefit pension scheme increased by £11.6m to a surplus of £4.6m between 31 January and 31 July 2018.
Saga’s half-year report revealed that the surplus was driven by the scheme's asset value rising by £7.2m to £314.5m over the six month period.
The increase in valuation was also aided by a reduction in the DB scheme’s liabilities, which fell by £4.4m to £309.9m.
A “small increase in corporate bond yields” and a “slight reduction in the expected future rate of inflation” were cited as reasons why the company’s liabilities have decreased.
The report also said: “There was a £2.4m reduction in the additional IAS19R pension charge following the completion of the triennial review of the group's defined benefit pension scheme in the previous year that aligned the pension current service cost with the employer contributions being paid.”
Saga operates a funded DB scheme, known as The Saga Pension Scheme, which is open to new members who accrue benefits on a career average salary basis. The scheme’s assets are held separately to the group’s assets in independently administered funds.
There is also a planned change in company structure in the near future, as the services that are currently provided by Saga Investment Services will in future be provided by Tilney, who Saga will work with “on an introductory basis rather than as joint partners”.
Saga Investment Services will cease to exist in November 2018.