Financial Statements 2019/2020


MIDDLESEX UNIVERSITY NOTES TO THE ACCOUNTS (continued)


Year Ended 31 July 2020


31. 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 2020 was £10,701k (2019: £10,302k) of which employers contributions totalled £8,579k (2019: £8,133k) and employees contributions totalled £2,122k (2019: £2,169k).


For the period to 31 July 2020 (date extended from period to 31 March 2020 under an arrangement with the scheme administrators) the overall ‘effective’ employer contribution rate was 27.4% (2019: 27.4%).


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 2019.


The total employer contributions expected to be paid into the scheme during the year ended 31 July 2021 (date extended from 30 April 2021) is £7,818k. This is based on the indicative rate from 1 August 2020 of 20.7% of pensionable salaries for current scheme funding (2019: 18.4%) and a deficit reduction contribution of £1,663k (2019: £2,829k). The funding deficit recovery plan, which covers the three year period from 1 August 2020 to 31 July 2023, set out to achieve an equivalent total annual employers contribution rate of 25.9% (three years ending 31 July 2020: 27.4%).


For the period to 31 March 2016 the scheme was contracted out of the State Additional Pension (S2P) of pension pro- vision. 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 2019 updated to 31 July 2020 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:


Mortality Life expectancy is based on the Fund’s VitaCurves with improvements in line with the CMI 2018 model, an allowance for smoothing of recent mortality experience and long term rates of 1.25% per annum for women and men.


Based on these assumptions the average future life expectancies assuming retirement at age 65 (years) are: At 31 July 2020


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 2019). Males Females


21.7 24.0


22.9 25.7


At 31 July 2019 21.0


23.3


22.3 25.1


124


Middlesex University


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