Principal actuarial assumptions

Valuation at 31 March 2011

Rate of increase in salaries (excluding promotional scale) Rate of increase to pensions in payment Rate used to discount scheme liabilities Rate of future price inflation (RPI) Rate of future price inflation (CPI) Expected return on scheme assets Rate of deferred revaluations

4.1% 3.5% 5.6% 3.6% 3.1% 6.2% 3.1%

2010

4.3% 3.7% 5.7% 3.8% –

6.4% 3.8%

The demographic assumptions have been taken to be the same as those adopted for the last actuarial funding valuation. The post-retirement mortality assumption uses the ‘92 series’ standard mortality tables with Medium Cohort improvements and underpins of 1% per annum. The life expectancies used to determine benefit obligations are:

31 March 2011 Male

Member aged 65 (current life expectancy) Member aged 45 (life expectancy at 65)

Analysis of movements in the SOFA

2011 £000

Current service cost Interest cost on scheme liabilities

Expected return on assets in the scheme Past service cost

Net finance charge Total pension cost recognised in the SOFA

Actual return less expected return on pension scheme assets Experience gain/(loss) on liabilities

Changes in assumptions underlying the present value of liabilities Gain on change in future revaluation assumption to CPI

Actuarial gains/(losses) recognised in the SOFA (8,892)

(20,624) 19,413 (197)

(1,408)

(10,300) 5,462 5,840

6 2,349 13,657

2010 £000

(6,642)

(17,088) 14,919

(406) (2,575)

(9,217) 57,338

(13,464) (78,783) –

(34,909)

The cumulative amount of actuarial gains and losses recognised in the SOFA since 1 April 2004 is a loss of £0.9 million (2010: £14.5 million loss). The actual return on scheme assets for the year was a gain of £24.9 million (2010: £72.3 million gain).

22.7 24.5

Female 25.8

27.8

31 March 2010 Male

22.6 24.4

Female

25.7 27.8

Annual Report and Accounts / Notes to the Accounts / 55