2009 annual report and accounts - RAF Benevolent Fund

Notes to the Financial Statements continued
8. Pension commitments
The FRS17 calculations have been carried out by an independent qualified actuary and relate to the RAF Benevolent Fund Staff Pension Fund.
The amounts recognised in the balance sheet are as follows:
2009 2008
£’000 £’000
Fair value of scheme assets 19,504 17,267
Present value of funded obligations (25,838) (19,399)
Present value of unfunded benefits (deficit in the scheme) (6,334) (2,132)
The amounts recognised in profit or loss are as follows:
Defined benefit pension schemes
2009 2008
£000 £000
Current service cost 372 487
Interest cost 1,233 1,208
Expected return on scheme assets (1,145) (1,651)
Total 460 44
Actual return on scheme assets 3,081 (3,612)
Changes in the present value of the defined benefit obligation are as follows:
Defined benefit pension schemes
2009 2008
£000 £000
Opening defined benefit obligation 19,399 20,415
Current service cost 372 487
Interest cost 1,233 1,208
Contributions by scheme participants 20 21
Actuarial losses/(gains) 6,061 (1,673)
Benefits paid (1,247) (1,059)
Closing defined benefit obligation 25,838 19,399
8. Pension commitments continued
Changes in the fair value of scheme assets (excluding any AVCs) are as follows:
2009 2008
£’000 £’000
Opening fair value of scheme assets 17,267 21,467
Expected return 1,145 1,651
Actuarial gains/(losses) 1,936 (5,263)
Contributions by employer 383 450
Contributions by scheme participants 20 21
Benefits paid (1,247) (1,059)
The Charity expects to contribute £950,000 to the scheme in 2010.
The major categories of scheme assets as a percentage of total scheme assets are as follows:
19,504 17,267
2009 2008
Target Return Fund 99% 95%
Fixed Interest and Cash 1% 5%
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
2009 2008
Discount rate 5.8% 6.5%
Expected return on scheme assets 7.5% 6.8%
Future pension increases (LPI) 3.5% 2.75%
Future salary increases 4% 3.4%
Inflation assumption 3.5% 2.9%
Mortality - Active & deferred members SAPS mc PA92 (C2010)
- Pensioners SAPS mc PA92 (C2005)
Life expectancies at age 63 (NPA)
Male currently aged 63 85.3 years 83.3 years
Male currently aged 43 86.6 years 83.7 years
Female currently aged 63 87.9 years 86.2 years
Female currently aged 43 89 years 86.7 years
Amounts for the current and previous four periods are as follows:
2009 2008 2007 2006 2005
Defined benefit obligation (25,838) (19,399) (20,415) (20,934) (20,329)
Plan assets 19,504 17,267 21,467 20,845 19,467
Surplus/(deficit) (6,634) (2,132) 1,052 (89) (832)
Experience adjustments on scheme liabilities* (234) - - (16) -
Experience adjustments on scheme assets* 1,936 (5,263) (435) 544 1,861
*positive experience adjustments represent a gain to the Fund
90 Years at the heart of the RAF family RAFBF Report & Accounts 23