59 Finsbury Food Group Annual Report & Accounts 2017


Notes to the Consolidated Financial Statements


13. Pension Schemes A number of companies within the Group operate defined contribution pension schemes with one company also operating a defined benefit scheme.


Defined Contribution Scheme The Group made contributions in respect of its defined contribution pension arrangements of £1,257,000 (2016: £1,187,000).


Defined Benefit Scheme The Group’s defined benefit scheme is the Memory Lane Cakes Pension Scheme, which is a separately administered plan. At the financial year end, the scheme had no active members accruing benefits (2016: nil), 196 deferred pensioner members (2016: 206) and 217 pensioner members (2016: 215).


The scheme was closed to future accrual on 31 May 2010. The assets of the scheme are held separately from those of the Company. The amounts in the Financial Statements for the 52 weeks ended 1 July 2017 relating to defined benefit pension are based on a full actuarial valuation dated 31 December 2015, which was updated at the end of the scheme’s financial year 2016.


A £200,000 contribution was paid during the financial year by Memory Lane Cakes Limited (2016: £117,000). The Group’s contribution has been agreed based on the outcome of the full actuarial valuation dated 31 December 2015. The valuation of the scheme on an equity/bond basis and projected unit method, showed that there was a deficit at 31 December 2015 of £2,505,000 equivalent to an 11% deficit of liabilities over assets. The valuation was conducted by a qualified independent actuary. This deficit is payable at a rate of £200,000 per annum until September 2020, and £100,000 thereafter until September 2023. The next full valuation is due by 31 December 2018, which will challenge the appropriateness of this recovery plan taking into consideration the deficit recovery contributions and actual returns realised on the pension scheme assets.


The present value of the Company’s committed deficit reduction contributions does not give rise to a net pension asset or additional balance sheet liability in accordance with IFRIC 14.


Approximately 90% of the assets are held in two diversified growth funds which target 6 month LIBOR +5% and CPI +5% respectively. The scheme’s assets are expected to provide real returns over the long-term. The expected return on cash balances held is based on the current Bank of England base rate rather than long-term deposit rates as cash is held to cover short-term requirements.


The full actuarial valuation differs from the financial year end valuation deficit of £10,498,000 (2016: £6,463,000). No allowance is made in the financial year end valuation for any outperformance expected from the scheme’s actual asset holding over and above high quality corporate bonds.


2017 £000


Fair value of plan assets


Present value of defined benefit obligations Deficit recognised


The fair value of plan assets and the return on those assets were as follows:


2017 £000


Equities/target return fund Property Cash


Fair value of plan assets Actual return on plan assets


17,872 1,989 124


19,985 1,319


None of the fair values of the assets shown above include any of the Company’s own financial instruments or any property occupied by, or any other assets used by, the Company.


2016 £000


17,291 1,868 128


19,287 (661)


19,985


(30,483) (10,498)


2016 £000


19,287


(25,750) (6,463)


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