Financial Statements 2017/18
29 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 of all contributions into the LGPS for the year ended 31 July 2018 was £10,180k (2017: £8,908k) of which employers contributions totalled £8,035k (2017: £6,869k) and employees contributions totalled £2,145k (2017: £2,039k).
From 2014, the University entered into a funding deficit recovery plan with the scheme administrators. This treatment required the employers cost of providing pension benefits to be broken down into two distinct contribution elements: employers current scheme funding and a deficit reduction contribution. Contributions under the plan are set for three years and renewed as part of the results of the full triennial actuarial valuation of the fund. The latest actuarial valuation was published for the period to 31 March 2016.
Under the current three year funding deficit recovery plan, for the period from 1 August 2017 (date extended from 1 April 2017) to 31 July 2018, employers current scheme funding was 18.4% (2017: 11.3%) of pensionable salaries and the deficit reduction contribution was £2,698k (2017: £3,638).
The total employer contributions expected to be paid into the scheme during the year ended 31 July 2019 is £8,043k. This is based on the indicative rate from 1 August 2018 of 18.4% of pensionable salaries for current scheme funding and a deficit reduction contribution of £2,763k. The funding deficit recovery plan, which covers the three year period from 1 August 2017 to 31 July 2020, set out to achieve an equivalent total annual employers contribution rate of 27.7% (three years ending 31 July 2017: 26.6%). 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.
More information about the LGPS can be obtained from
www.lgpsmember.org/
Financial Reporting Standard 102 (FRS102) The following information is based upon a full actuarial valuation of the Fund at 31 March 2016 updated to 31 July 2018 by a qualified independent actuary, using financial assumptions in accordance with the requirements of 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 are dependent on the following major assumptions:
Longevity assumptions: The post retirement mortality assumptions adopted for life expectancy are the S1PA tables. Based on these assumptions the average future life expectancies assuming retirement at age 65 (years) are:
Current pensioners (retiring today) Males Females Future pensioners (retiring in 20 years)*
* Figures assume members aged 45 as at the last formal valuation date (31 March 2016). Financial assumptions:
Retail prices inflation (RPI increases) Consumer prices inflation (CPI increases) Rate of increase in pensions (CPI increases) Rate of increase in salaries Discount rate for liabilities
Middlesex University Males Females
At 31 July 2018 21.9
24.3
23.9 26.5
At 31 July 2018 3.4%
2.4% 2.4% 2.7% 2.8%
At 31 July 2017 21.9
24.3
23.9 26.5
At 31 July 2017 3.5%
2.5% 2.5% 2.8% 2.7%
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