The funding level
We are pleased to report that throughout 2024 the funding level of The Abbott Laboratories Pension Fund has been over 200%. This means that the Fund has sufficient assets to ensure all members' benefits are secure. The Company has not had to pay any contributions into the Fund but remains committed to staying fully funded in order to pay members' benefits. The Fund's next triennial valuation is due in March 2025. This is when the Trustees and the Actuary take a detailed look at the Fund's financial position. We'll let you know the outcome of the valuation when the results are available.
Our investment strategy
During 2024, we agreed a new investment strategy which aims to protect the Fund against negative market movements. More of the Fund will be invested in government bonds (or ‘gilts') as their value moves more closely in line with the value of liabilities. We still have significant investments in shares in companies around the world to achieve investment growth. Over the next five years we plan to gradually move more of the Fund's investments into gilts to protect the strong funding position we have built up over recent years.
Tax changes
The government abolished the Lifetime Allowance (LTA) with effect from April 2024. The LTA was a limit on the total amount of pension savings you could build up over your lifetime without incurring a large tax charge.
However, there are new tax limits which may affect the amount of tax-free cash you can take out of your pension, and the tax that's payable on your benefits in the event of your death.
Your AVC options
The Trustee allows active members to make Additional Voluntary Contributions (AVCs) into the Fund, which are currently managed separately by Aviva. Over the year we have reviewed the AVC investment choices, introduced some additional options, and simplified the process for new AVC payers.
New benefit statements
The government also changed the rules about how we provide AVC projections. We found a way to comply fully with the new requirements and still produce our own unique style of benefit statements. We hear that members value the benefit statements, but always welcome your feedback on what we can do better.
Introducing Aptia
Earlier this year we told you that Aptia had taken over the pensions administration business of Mercer. The transition to Aptia went very well and the Fund is still looked after by many of the same people who worked for Mercer. We are pleased with the service we have received from Aptia and the day-to-day administration of benefits is running smoothly. The Trustee Directors and the Abbott pensions team receive regular updates from Aptia to ensure this good standard of service continues. You may still see some Mercer branding on quotes and statements but over time everything will transition to the Aptia brand.
Your Trustee Board
The new Trustee Board is settling in well together and has remained unchanged in 2024. Jim Churcher, who many of you will know as Abbott's Pensions Manager, retired in November 2024 after 14 years as Secretary to the Trustee. Jim's hard work and dedication over his time at Abbott means that we have a very well-managed Fund with a strong governance framework. We wish Jim a long and healthy retirement and hope that he enjoys this next phase of his life. Jim is replaced by Jackie Baker, who has many years of experience within the pensions industry, and we look forward to working with her.
We hope that you find this annual round-up useful. We want to ensure that the Fund is working for you, our members, and we are always looking for ways that we can improve. If you have any feedback on this or any other communications from us, please do get in touch and let us know.
Merry Christmas and Happy New Year
Jonny Wood
Chair of the Trustee