Annual Reports - RTÉ

ANNUAL REPORT & GROUP FINANCIAL STATEMENTS 2007
19 Pension arrangements
The Group is the principal sponsoring employer of the RTÉ Superannuation Scheme (a funded contributory defined benefit pension
scheme to which no new employees have been admitted since 1989) and the RTÉ Defined Contribution Pension Scheme and also
makes contributions to a number of other smaller defined contribution pension schemes on behalf of employees.
As is required by the Pensions Act, independent actuarial valuation reports based on actuarially determined long-term funding
assumptions are regularly carried out in respect of the RTÉ Superannuation Scheme. The most recent actuarial funding valuation
report is dated 1 January 2008 and was completed subsequent to the year end by the actuaries, Mercer, who are neither officers nor
employees of the Group. This actuarial funding valuation, which uses the “attained age” method of valuation to derive the future service
cost, discloses the scheme to have a surplus of assets over liabilities of €41.2m (1 January 2007: €35.7m), with allowance being
made in the liabilities for post retirement increases on a full parity basis. The principal financial assumption underlying the actuarial
funding valuation was that the scheme’s investments will on average earn a long-term real rate of investment return of 2% per annum
over general salary inflation for members. The market value of the assets of the scheme as at 1 January 2008 was €996.7m
(1 January 2007: €1,037.1m) and the level of funding exceeded 100% at the valuation date. The actuarial funding valuation report
is not available for public inspection; however, the results of valuations are advised to members.
The employer pension contributions charged in respect of each year for the various schemes were:
2007 2006
€’000 €’000
RTÉ Superannuation Scheme
- current service cost 10,107 10,005
- past service cost 688 152
10,795 10,157
RTÉ Defined Contribution Pension Scheme 5,955 5,062
Other schemes 638 578
As required by the accounting standard IAS 19, the actuaries, Mercer, also prepare a report setting out the position of the RTÉ
Superannuation Scheme using the accounting valuation methodology specified in IAS 19. The IAS 19 approach to defined benefit
fund accounting valuation and reporting uses the projected unit credit method to derive annual future pension charges, values assets
at current fair market value and discounts future liabilities (using high grade corporate bond rates of approximate duration to the
estimated life of the liabilities of the scheme) to arrive at a net present value of the liabilities of the scheme.
The major assumptions used for the purposes of the IAS 19 based accounting valuation of the RTÉ Superannuation Scheme were:
2007 2006 2005
Valuation method Projected unit Projected unit Projected unit
Projected rate of increase in salaries 4.00% 3.60% 3.30%
Projected rate of increase in pensions in payment 4.00% 3.60% 3.30%
Discount rate 5.50% 4.50% 4.40%
Inflation assumption 2.25% 2.00% 2.00%
Mortality Years Years Years
Life Expectancy Future Retirees
Male of age 65 20.5 20.2 20.2
Female of age 65 23.5 23.2 23.2
Life Expectancy Existing Pensioners
Male of age 65 19.5 19.0 19.0
Female of age 65 22.4 22.0 22.0
The weighted average plan asset allocation at the year end were as follows:
2007 2006
Asset category
Equities 55.4% 76.2%
Bonds 25.4% 11.3%
Property 9.3% 8.7%
Other 9.9% 3.8%
100% 100%
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