In this Q&A, you should find all the information you need around the Medical Sickness Society (MSS) Fund Merger. If you still have questions, require assistance after reading this or want help accessing any of the documents we refer to below, you can:
- Call our Customer Engagement Centre for free on 0800 058 2965. Our lines are open Monday to Friday between 9am and 5pm
- Write to us at MSS Fund Merger Queries, Wesleyan Assurance Society, Colmore Circus, Birmingham B4 6AR
- Email us at mssfundmerger@wesleyan.co.uk. Email can be an insecure method of communication, so we do not recommend including any sensitive information when contacting us this way.
A. How do I know if I’ve got a Medical Sickness Society Fund with-profits plan?
We’ve only written to MSS Fund with-profits plan holders; however, it’s possible you’ve claimed your plan(s) since we created our mailing list. If you no longer have an MSS Fund with-profits plan, you can ignore this communication.
With-profits plans in the MSS Fund would have been taken out with Medical Sickness Society before 1st July 1997, and annual statements for most of these plans will show that the value includes regular and/or final bonuses.
The MSS Fund closed for new business on 1st July 1997.
B. Will my premium be affected by the merger?
No.
C. Will my plan terms and conditions be affected by the merger?
No.
D. Will the level of my plan fees or charges be affected by the merger?
No.
E. Will how my plan is invested change?
No.
The investments underlying your plan will not be affected by the merger, as the Open Fund holds the same investments as the MSS Fund currently does. In particular, you’ll still hold a with-profits plan. Your final claim value will continue to be linked to the performance of the same investments, and will continue to benefit from smoothing. Smoothing is a mechanism to reduce the effect of short-term fluctuations on the value of your plan caused by the ups and downs of your underlying investments.
Please note, this section is not relevant if you have an income protection policy or are already receiving annuity payments.
F. Will there be any changes to my plan documents?
No.
Your annual statement will contain the same information as it does now. The only difference is that it will no longer refer to the MSS Fund.
You may also notice that there will not be a separate Principles and Practices of Financial Management (PPFM) document for the MSS Fund. Our new PPFM will combine all the details relating to the Open Fund and the old MSS Fund into one document. In September 2026, we’ll contact you to inform you of these changes to the PPFM.
G. Will my plan benefits be safe?
Yes. If the merger goes ahead your plan will be part of our other with-profits fund, the Open Fund. This is a larger and financially strong fund.
A. Why do you plan to merge the MSS Fund into the Open Fund?
Following the transfer of Medical Sickness Society plans to Wesleyan Assurance Society in 1997, the MSS Fund has been closed to new business and so is reducing in size as plan holders take their benefits when their plans end. This situation was anticipated at the time of the transfer, and the agreement drawn up included a provision for the funds to merge once the MSS Fund had fallen to a certain size.
As a fund gets smaller, it becomes more vulnerable to fluctuations. So, as the MSS Fund gets smaller, the payouts to plan holders could fluctuate more. The MSS Fund currently remains large enough to operate effectively. However, before the MSS Fund gets too small, we believe it’s in the best interests of MSS Fund with-profits plan holders to merge the MSS Fund into the larger Open Fund. This fund contains all our other with-profits plans and is still open to new business. Its larger size means it is more able to cushion any fluctuations.
Merging the funds will therefore reduce the risk of fluctuations in payouts for MSS Fund plan holders.
B. Are there any changes in how my benefits will be determined once the MSS Fund is merged with the Open Fund?
Your payout will continue to be dependent on the performance of the same investments, and you will continue to benefit from smoothing, as described earlier. You will also continue to get a share of the ‘surplus assets’ that the MSS Fund had when it was transferred to Wesleyan in 1997. However, there is a beneficial change in the way these will be allocated as described in more detail below.
Surplus assets:
- When the MSS with-profits business transferred to Wesleyan in 1997, the MSS Fund had more money than was required to meet the obligations to plan holders. This excess money is called ‘surplus assets’.
- Since then, we have been distributing these surplus assets to MSS Fund with-profits life and pension plan holders, thereby increasing the values shown on your statements and paid out on claims. These distributions have contributed significantly to the payouts we have made and have helped to make these payouts well in excess of those available from our competitors.
- Surplus assets can fluctuate in value due to many factors, including the economic environment. As the size of the MSS Fund decreases, the fund is more vulnerable to fluctuations in the value of these assets. This could impact future payouts, with plan holders potentially getting a significantly lower distribution than we have been able to give plan holders who have already exited.
- By merging the funds, the larger Open Fund is able to support distributions of surplus assets with increased certainty.
- The main part of all payouts (before or after the merger) is still dependent on the investment performance of the fund, subject to smoothing as described earlier. The distribution of surplus assets is an added benefit on top of this.
Please note, this section is not relevant if you have an income protection policy or are already receiving annuity payments.
C. What if I make a claim before the merger takes place?
If you make a claim before the merger takes place, you will not be affected by any changes resulting from the merger. Whether you claim just before or just after the merger is not expected to materially impact the payout you get.
D. Is Wesleyan making a profit from this merger?
No. MSS Fund with-profits plan holders can still expect the value of all the surplus assets in the MSS Fund to be fully distributed to them over the lifetime of their plans via the provision of bonuses.
E. Will I be able to vote on the merger?
No. There will not be a plan holder vote on the merger; however, you have every opportunity to share your thoughts. Any comments you make will be shared with the With Profits Actuary and the Independent Actuary for their consideration. They’ll also be shared with our regulators: the Financial Conduct Authority and the Prudential Regulation Authority.
Please share any feedback by 28th August.
F. What is the timeline for the Merger?
- June 2026 – We inform with-profits plan holders about the planned merger date.
- By end September 2026 – We’ll inform MSSF with-profits plan holders of the proposed changes to the Principles and Practices of Financial Management (PPFM) as a result of the merger.
- December 2026 – The Wesleyan Assurance Society Board will decide on whether to proceed with the merger as at 1st January 2027.
- From early January 2027 – You can find out if the merger went ahead by visiting www.wesleyan.co.uk/help/mss-fund-merger.
A. How will you protect my interests?
The merger will only go ahead if the Wesleyan Assurance Society Board is satisfied it is in the best interests of with-profits plan holders. To determine this, advice will be taken from the Wesleyan With Profits Committee, the MSS Fund Monitoring Committee, Wesleyan’s With Profits Actuary and an Independent Actuary. More detail on these committees and experts is provided below.
We are also regulated by the Financial Conduct Authority (FCA) who have been provided with details of the merger and the reports produced by Wesleyan’s With Profits Actuary and the Independent Actuary.
B. Who is involved in advising the Board?
- Wesleyan With Profits Committee
- MSS Fund Monitoring Committee
- Wesleyan’s With Profits Actuary
- Independent Actuary
The Wesleyan With Profits Committee operates in relation to both the Open Fund and the MSS Fund. The Committee is made up of independent non-executive directors whose role is to hold Wesleyan management to account, to advise the Board and to ensure the interests of with-profits plan holders are appropriately considered. It provides advice and recommendations on compliance with the principles and practices set out in the PPFM (Principles and Practices of Financial Management), achieving customer fairness, and any other issues with the potential to impact groups of plan holders.
The With Profits Committee will review the terms of the merger and advise the Board on the fairness of those terms.
The MSS Fund Monitoring Committee is formed of MSS Fund customers. The Committee’s key objective is to monitor and report to the Board on the application of the terms of the 1997 Transfer Scheme that was put in place when the Medical Sickness Society business transferred to Wesleyan. The Monitoring Committee may take any appropriate external advice it considers necessary. Wesleyan has appointed an Independent Actuary to consider and advise the Committee on the fairness of the merger terms.
The Monitoring Committee will review the terms of the merger and, having taken advice from the Independent Actuary, will advise the Board on the compliance of those terms with the 1997 Transfer Scheme. In line with the 1997 Transfer Scheme, the role of the Monitoring Committee shall cease when the MSS Fund is merged with the Open Fund. From this point onwards, the interests of ex-MSS Fund plan holders will be represented by the With Profits Committee.
The role of Wesleyan’s With Profits Actuary is to assess the impact of the merger on both MSS Fund and Open Fund with-profits plan holders, to ensure the terms of the merger are fair for both sets of plan holders. They will provide their opinion to the With Profits Committee, the Monitoring Committee and the Board, and will provide a report to the Financial Conduct Authority and the Prudential Regulation Authority, our industry regulators.
A statement from the With Profits Actuary:
"In the merger of the Medical Sickness Society Fund (MSSF) and the Open Fund of Wesleyan there are areas of discretion, exercised by the Wesleyan Board, that can impact the amount that is paid out on your with-profits policy. As With Profits Actuary to Wesleyan I am responsible for advising the Society’s Board on the exercise of discretion affecting the with-profits policyholders.
"I have reviewed the terms of the merger and I believe that the terms proposed are fair, and that undertaking the merger is in the interests of the MSSF with-profits policyholders. I am also content that the merger is fair to the Wesleyan Open Fund with-profits policyholders."
The Independent Actuary has been appointed by Wesleyan to advise the MSS Fund Monitoring Committee and the Wesleyan Board on the fairness of the terms. This appointment has been endorsed by the MSS Fund Monitoring Committee.
The Independent Actuary’s role is to assess the impact of the merger on MSS Fund and Open Fund with-profits planholders’ benefit expectations and benefit security. Whilst we will pay a fee for this work, this does not depend on the conclusions. The Independent Actuary’s duty is to give the MSS Fund Monitoring Committee and the Board an independent opinion, which will also be reported to the Financial Conduct Authority and the Prudential Regulation Authority, our industry regulators.
The Independent Actuary has produced a summary report. The full report will also be available upon request.
To request physical copies of the reports mentioned above you can contact us by phone, email or post using the details at the top of this Q&A.