Strategic Report


Corporate Governance


Financial Statements Notes to the Consolidated Financial Statements/Continued


Finsbury Food Group Annual Report and Accounts 2020


87 14. Pension Schemes/Continued


2020 £000


Expense recognised in the Consolidated Statement of Comprehensive Income Past service costs


Interest on plan assets/finance income Interest on plan obligations/finance expense Total expense


Remeasurement gains and losses recognised directly in equity in the Statement of Comprehensive Income and Expense since 1 July 2006, the transition date to Adopted IFRS


Cumulative amount at beginning of financial year


Recognised in the financial year – return on plan assets less interest Recognised in the financial year – experience gains on liabilities


Recognised in the financial year – (loss)/gain from changes to financial assumptions Recognised in the financial year – gains from changes to demographic assumptions Cumulative amount at end of financial year


(13,135) 528 -


(4,334) -


(16,941)


2020 %


Principal long-term actuarial assumptions at the year end CPI price inflation assumption Increases to pensions in payment Discount rate for liabilities Rate of return for plan assets


(12,803) 384


1,614


(2,631) 301


(13,135)


2019 %


2019 £000


- 431


(687) (256)


(362) 502


(784) (644)


2.35 2.35 1.50 1.50


2.40 2.40 2.30 2.30


The differential between the assumed rate of inflation and the discount rate for liabilities is 0.85% (2019: 0.10%). Salary inflation assumptions are as determined by the Board with regard to price inflation. The salary inflation from 31 May 2010 when the Scheme closed to future accrual was assumed to be in line with inflation.


The financial assumptions are based on market conditions as at the review date of 27 June 2020 with discount rates based on the yields on long- dated high-quality corporate bonds. The discount rate is lower than the discount rate used last year reflecting the change in bond yields over this period. The rate of return for plan assets is the long-term rate that reflects the yield on high-quality corporate bonds as required under changes to IAS 19. The rate of return is effectively based on the discount rate with no allowance made for any outperformance expected from the Scheme’s actual asset holding. The actual return on the Scheme’s assets, net of expenses, over the year to the review date was around 5% (2019: 5%). The actual return has been impacted by the worldwide Covid-19 pandemic that has had a profound impact on the economy as countries went into lockdown; uncertainty and volatility remain a feature of the current equity markets.


Changing the year end 2020 assumptions to those of 2019 year end listed above, the deficit would have been £10,840,000 compared to the reported deficit of £15,174,000.


2020


Post-retirement mortality assumption


S3NA tables with CMI 2017 (core parameters) projections and 1.25% pa long-term rate of improvement


2019


S3NA year of birth tables with CMI 2017 projections and 1.25% pa long-term rate of improvement


Under the mortality tables adopted, the assumed future life expectancy at age 65 is as follows: 2020


Male currently at age 45 Female currently at age 45 Male currently at age 65 Female currently at age 65


Allowance for GMP equalisation (increase liabilities at the review date by):


24.1 26.4 22.7 25.0 1.2%


2019


24.0 26.3 22.6 24.9 1.2%


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