Middlesex University
Financial Statements 2015/16
30. Pension Schemes (continued) Local Government Pension Scheme
The Local Government Pension Scheme (LGPS) is a funded defined benefit scheme, with assets held in separate trustee administered funds. It is administered locally by the London Borough of Barnet and is a multi-employer scheme. The total contribution made for the year ended 31 July 2016 was £8,753k (2015: £8,437k) of which employers contributions totalled £6,755k (2015: £6,516k) and employees contributions totalled £1,998k (2015: £1,921k).
For the period from 1 April 2015 to 31 March 2017 the overall employer contribution rate is 26.6%. In 2014 the University entered into a funding deficit recovery plan with the scheme administrators. This treatment required the cost of providing pension benefits to be broken down into two distinct elements: current scheme funding of 11.3% of pensionable salaries from 1 April 2014 to 31 March 2017and a deficit reduction contribution. The deficit reduction contribution was £3,541k in the period to 31 March 2016 and is £3,638k in the period to 31 March 2017. The indicative employers rate (which includes the current scheme funding and deficit reduction elements) from 1 April 2017 will be disclosed in the next full actuarial valuation of the fund for the period to 31 March 2016 when it is published in 2017. The total employer contributions expected to be paid into the scheme during the year ended 31 July 2017 are £6,761k.
For the period to 31 March 2016 the scheme was contracted out of the State additional Pension (S2P) of pension provision. Contracting out on a defined benefit basis ended in April 2016, when the government’s state pension reforms came into force.
Financial Reporting Standard 102 (FRS102)
The following information is based upon a full actuarial valuation of the Fund at 31 March 2013 updated to 31 July 2016 by a qualified independent actuary, using financial assumptions that comply with FRS102.
Basis for estimating assets and liabilities
The liabilities have been assessed using the projected unit method, an estimate of the pensions that will be payable in future years dependent on the following major assumptions: Mortality assumptions: The post retirement mortality tables adopted are the S1PA tables.
Life expectancy from age 65 (years) Current pensioners (retiring today)
Males Females Future pensioners (retiring in 20 years)*
* Figures assume members aged 45 as at the last formal valuation date. Financial assumptions:
Retail price inflation (RPI increases) Consumer price inflation (CPI increases) Rate of increase in salaries Rate of increase for pensions Discount rate for liabilities
Males Females
At 31 July 2016 22.1
24.4
24.2 26.8
At 31 July 2016 2.9%
1.9% 3.9% 1.9% 2.4%
Share of assets by category: The estimated share of assets as a percentage of total plan assets as at 31 July 2016 is set out below:
Asset category: Equities Bonds
Property Cash Total
At 31 July 2016 76%
23% 0% 1%
100%
The actuary has estimated the bid value of the fund’s assets as at 31 July 2016 to be £1.044bn based on the information provided by the administering authority and allowing for index returns where necessary.
70
At 31 July 2015 67%
32% 0% 1%
100%
At 31 July 2015 22.0
24.3
24.1 26.7
At 31 July 2015 3.4%
2.5% 4.3% 2.5% 3.7%
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