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10 Pensions
The British Land Group of Companies Pension Scheme (‘the scheme’) is the principal pension scheme in the Group. It is a defined benefit scheme which is externally funded and which is not contracted out of SERPS. The assets of the scheme are held in a trustee-administered fund and kept separate from those of the company. The Group has five other small pension schemes. The total pension cost charged for the year was £2.9m (2003: £1.9m).
A full actuarial valuation of the scheme was carried out at 31 March 2003 and updated to 31 March 2004 by consulting actuaries Hewitt Bacon & Woodrow. The employer’s contributions will be paid in the future at the rate recommended by the actuary of 38.5% pa of basic salaries. The major assumptions used for the actuarial valuation were:
2004 % pa |
2003 % pa |
2002 % pa |
|
|---|---|---|---|
Discount rate |
5.50 |
5.50 |
6.00 |
Salary inflation |
5.10 |
4.80 |
4.75 |
Pensions increase |
2.90 |
2.50 |
2.50 |
Price inflation |
2.90 |
2.60 |
2.50 |
The assets and liabilities of the scheme at 31 March 2004 and the expected return on assets over the following year were as follows:
Expected return 2004/5 % |
£m |
Expected
return 2003/4 % |
£m |
Expected
return 2002/3 % |
£m |
|
|---|---|---|---|---|---|---|
Bonds |
4.5 |
17.0 |
4.5 |
9.9 |
5.0 |
5.5 |
Equities |
7.0 |
26.8 |
7.0 |
15.3 |
7.0 |
22.9 |
Other |
4.0 |
0.6 |
4.0 |
3.0 |
4.5 |
0.2 |
Total assets |
44.4 |
28.2 |
28.6 |
|||
Liabilities |
(44.3) |
(36.8) |
(27.2) |
|||
Surplus (deficit) in scheme |
0.1 |
(8.6) |
1.4 |
|||
Related deferred tax asset (liability) |
2.6 |
(0.4) |
||||
Net pension asset (liability) |
0.1 |
(6.0) |
1.0 |
|||
The movement in the (deficit) surplus during the year is analysed below:
2004 £m |
2003 £m |
||
|---|---|---|---|
Opening (deficit) surplus in the scheme |
(8.6) |
1.4 |
|
Current service cost |
(2.1) |
(1.4) |
|
Past service cost |
(0.3) |
||
Employer contributions |
11.7 |
3.0 |
|
Other finance (cost) income |
(0.3) |
0.3 |
|
Actuarial loss |
(0.3) |
(11.9) |
|
Closing surplus (deficit) in the scheme |
0.1 |
(8.6) |
|
History of experience gains and losses |
2004 |
2003 |
|
Difference between the expected and actual return on scheme assets: |
|||
Amount (£m) |
3.8 |
(4.4) |
|
Percentage of scheme assets |
8.6% |
15.5% |
|
Experience gain and losses on scheme liabilities: |
|||
Amount (£m) |
0.8 |
(1.7) |
|
Percentage of the present value of scheme liabilities |
1.9% |
4.5% |
|
Total actuarial loss recognised in the statement of total recognised
gains and losses: |
|||
Amount (£m) |
(0.3) |
(11.9) |
|
Percentage of the present value of scheme liabilities |
0.8% |
32.4% |
|
