Statement of Accounts 2011/2012 - Blackburn with Darwen Borough ...

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Assets and liabilities in relation to retirement benefits NOTES TO THE FINANCIAL STATEMENTS Reconciliation of present value of the scheme liabilities (defined benefit obligation): Funded liabilities: Local Government Pension Scheme Unfunded liabilities: Discretionary Benefits 2011/12 2010/11 2011/12 2010/11 £000 £000 £000 £000 Opening balance at 1 April ( 460,779 ) ( 491,527 ) ( 7,219 ) ( 8,620 ) Current service cost (11, 562 ) (14,256 ) 0 0 Interest cost ( 25,280 ) (27,616 ) ( 379 ) ( 465 ) Contributions by scheme participants ( 4,212 ) ( 4,812 ) 0 0 Past service cost/(gain) ( 152 ) 28,101 0 398 Actuarial (gains)/losses ( 18,247 ) 33,607 ( 160 ) 828 Curtailments ( 841 ) ( 112 ) 0 0 Settlements 1,777 0 Benefits/transfers paid 16,088 15,836 638 640 Closing balance at 31 March ( 503,208 ) ( 460,779 ) ( 7,120 ) ( 7,219 ) Reconciliation of fair value of the scheme (plan) assets: Local Government Pension Scheme 2011/12 2010/11 £000 £000 Opening balance at 1 April 322,669 304,869 Expected rate of return 21,080 19,645 Actuarial (gains)/losses ( 15,806 ) ( 3,714 ) Settlements ( 387 ) 0 Employer contributions 12,576 13,533 Contributions by scheme participants 4,212 4,812 Benefits/transfers paid ( 16,726 ) ( 16,476 ) Closing balance at 31 March 327,618 322,669 The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the Balance Sheet date. Expected returns on equity investments reflect long term real rates of return experienced in the respective markets. The actual return on scheme assets in the year was £5,274,000 (£24,768,000 in 2010/11). - - 70 - -
Local Government Pension Scheme history 31 March 2012 NOTES TO THE FINANCIAL STATEMENTS 31 March 2011 31 March 2010 31 March 2009 31 March 2008 £000 £000 £000 £000 £000 Present value of liabilities Local Government Pension ( 503,208 ) ( 460,779 ) ( 491,527 ) ( 342,200 ) ( 404,643 ) Scheme Discretionary Benefits ( 7,120 ) ( 7,219 ) ( 8,620 ) ( 7,337 ) ( 8,732 ) Fair value of assets in the Local Government Pension Scheme 327,618 322,669 304,869 225,016 278,890 Deficit in the scheme ( 182,710 ) ( 145,329 ) ( 195,278 ) ( 124,521 ) ( 134,485 ) Local Government Pension Scheme ( 175,590 ) ( 138,110 ) ( 186,658 ) ( 117,184 ) ( 125,753 ) Discretionary Benefits ( 7,120 ) ( 7,219 ) ( 8,620 ) ( 7,337 ) ( 8,732 ) Total ( 182,710 ) ( 145,329 ) ( 195,278 ) ( 124,521 ) ( 134,485 ) The liabilities show the underlying commitments that the Council has in the long-run to pay post employment (retirement) benefits. The total liability of £510M has a substantial impact on the net worth of the Council as recorded in the Balance Sheet, resulting in a negative overall balance of £183M. However, statutory arrangements for funding the deficit mean that the financial position of the Council remains healthy: • the deficit on the local government scheme will be made good by increased contributions over the remaining working life of employees (i.e. before payments fall due), as assessed by the scheme actuary. • finance is only required to be raised to cover discretionary benefits when the pensions are actually paid. The total contributions expected to be made to the Local Government Pension Scheme by the Council in the year commencing 1 April 2012 is £10,500,000. Expected contributions for the Discretionary Benefits Scheme in the year commencing 1 April 2012 are £638,000. Basis for estimating assets and liabilities Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years, dependent on assumptions about mortality rates, salary levels etc. Both the Local Government Pension Scheme and Discretionary Benefits liabilities have been assessed by Mercer Human Resources Consulting Limited, an independent firm of actuaries, estimates for the Lancashire County Fund being based on the latest full valuation of the scheme as at 31 March 2010. The principal assumptions used by the actuary have been: Long-term expected rate of return on assets in the scheme: Funded liabilities: Local Government Pension Scheme Equity investments 7.0% 7.5% Government Bonds 3.1% 4.4% Other Bonds 4.1% 5.1% Property 6.0% 6.5% Cash/Liquidity 0.5% 0.5% Other 7.0% 7.5% Overall expected return 5.69% 6.54% - - 71 - - Unfunded liabilities: Discretionary Benefits 2011/12 2010/11 2011/12 2010/11 £000 £000 £000 £000
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Statement of Accounts 2011/2012
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INDEPENDENT AUDITORS’ REPORT TO T
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FINANCIAL REPORT 2011/2012 1.0 Over
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FINANCIAL REPORT 2011/2012 it will
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FINANCIAL REPORT 2011/2012 Schools
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STATEMENT OF RESPONSIBILITIES 1.0 T
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COMPREHENSIVE INCOME AND EXPENDITUR
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CASH FLOW STATEMENT The Cash Flow S
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Page 46 and 47: Reconciliation of the carrying valu
Page 52 and 53: NOTES TO THE FINANCIAL STATEMENTS C
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Page 68 and 69: 31 March 2011 NOTES TO THE FINANCIA
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Page 78 and 79: The provision made against estimate
Page 80 and 81: COLLECTION FUND INCOME AND EXPENDIT
Page 82 and 83: ANNUAL GOVERNANCE STATEMENT Forewor
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Page 86 and 87: ANNUAL GOVERNANCE STATEMENT Officer
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Statement of Accounts 2011/2012 - Blackburn with Darwen Borough ...

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