Jersey Post Annual Report and Accounts | 2012 - States Assembly

Jersey Post Annual Report and Accounts | 2012
1.10 Pension Costs (continued)
Pension scheme liabilities are measured using the projected unit credit method, discounted at the current rate of return on
a high quality corporate bond of equivalent term and currency to the liability. Recoverable pension scheme surpluses and
pension scheme deficits are recognised in the balance sheet.
With effect from the financial year ending 31 December 2012 Jersey Post is changing the approach to accounting for
pension costs under FRS 17. In previous years the policy has been to measure the value of the future benefit payments
to beneficiaries, using assumptions that are consistent with the principles prescribed by FRS 17 and, importantly, being
appropriate to the term over which those payments are made. It is recognised that this accounting treatment does not
appropriately reflect the reality of the Terms of Admission which sets out Jersey Post’s relationship with the Scheme. In
particular, the Terms of Admission provides for an internal transfer of assets (the Internal Transfer) out of the Jersey Post
Sub Fund and into the general PECRS fund in respect of members who have left Jersey Post’s employment. From that
point on Jersey Post is no longer responsible for the financing of those benefits and the underlying liabilities are also
transferred. The Internal Transfer of assets is calculated by the Scheme Actuary using a methodology prescribed by the
Terms of Admission and having reference to the assumptions used by the Scheme Actuary for other purposes, namely the
triennial funding valuation of the PECRS and the assumptions used to calculate Cash Equivalent Transfer Values (CETVs) to
early leavers. In effect, Jersey Post’s obligation to the PECRS is to provide funding for the Internal Transfers when members
leave service, instead of funding for the future benefit payment to those individuals.
Defined Contribution
Both the company and employees pay contributions into an independently administered fund. The cost of providing these
benefits, recognised in the profit & loss account, comprises the amount of contributions payable to the scheme in respect
of the year.
1.11 Operating Leases
Rentals receivable and payable under operating leases are charged in the profit and loss account on a straight line basis
over the lease term.
1.12 Research and Development
Expenditure on research and development is written off in the period in which it is incurred.
1.13 Related Parties
The Group has taken advantage of the exemption in Financial Reporting Standard 8 ‘Related Party Disclosures’ from
disclosing transactions with related parties that are members of the Group on the basis that all subsidiaries are wholly
owned.
2. Operating Profit for the Year
2012 2011
£’000 £’000
Operating profit for the year is stated after charging the following:
Auditor’s remuneration • audit 65 63
• non-audit 20 26
3. Employees Costs
2012 2011
£’000 £’000
Wages and salaries 11,999 12,743
Social security contributions 709 729
Employer pension contributions 827
_______
1,161
_______
_______
13,535
_______
14,633
38