Middlesex University
Financial Statements 2015/16
30. Pension Schemes
The University’s employees belong to two principal pension schemes, the Teachers’ Pension (TP) for most academic staff and the Local Government Pension Scheme (LGPS) for all other staff. The schemes are defined benefit schemes providing benefits based on career average design. Benefits accrued prior to the schemes transitions to career average arrangements are protected providing benefits based on a final pensionable salary. The pension service costs and contributions for the year for the University and its subsidiaries in respect of these two schemes was £13,357k (2015: £11,497k).
Teachers’ Pension
The Teachers’ Pension (TP) is operated by the Department for Education (DfE) and is governed by statutory regulations. Under the definitions set out in Financial Reporting Standard 102 (FRS102), the TP is a multi-employer pension scheme. As the TP is underwritten by central government and the University has no future obligation to make contributions to the scheme, this is effectively a defined contribution scheme in so far as it affects the University. As a result, contributions to this scheme are accounted for as if the scheme was a defined contribution scheme.
The TP is a statutory, contributory, unfunded, defined benefit scheme. The regulations under which the TP operates are the Teachers’ Pensions Regulations 1997, as amended. Contributions are credited to the Exchequer on a “pay as you go” basis under arrangements governed by the Superannuation Act 1972. A notional asset value is ascribed to the Scheme for the purposes of determining contribution rates.
The University has set out below the information available on the Scheme and the implications for the University in terms of the anticipated contribution rates.
The employer’s contribution rates set by the schemes actuary and approved by the DfE for the University’s academic staff were 14.1% of pensionable salaries to 31 August 2015 and from 1 September 2015 (to 31 March 2019) increasing to 16.48% of pensionable salaries.
The scheme is subject to full valuation every four years with the most recent valuation being 31 March 2012. The key highlights from this report are as follows:
Funding position
Aggregate value of liabilities Aggregate value of assets Total (shortfall)
At 31 March 2012 £bn
191.5 176.6 (14.9)
Total Scheme liabilities for service to the effective date are £191.5bn and notional assets of £176.6bn giving notional past service deficit of £14.9bn.
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