Annual Report 2006-2007 - Cafcass

Other commitments
Cafcass had a three-year contract with Unisys Ltd, ending 31st March 2006. Cafcass has exercised the option of a twoyear
extension to continue to provide finance, payroll and IT managed services. The commitment in 2007–08 is £2.872m
(including VAT).
20 Pension liabilities (FRS17)
WYPF’s actuary, Mercer Human Resource Consulting carried out a FRS 17 valuation for Cafcass as at 31st March 2007.
The scheme provides funded defined benefits based on final pensionable salary. The assets of the scheme are held
separately from those of Cafcass and are invested in managed funds. Employer contribution rates are determined by a
qualified actuary on the basis of triennial valuations.
Cafcass accounts for scheme liabilities in accordance with FRS 17 – Retirement benefits. This is the second year a FRS
17 disclosure has been made and as such there is limited history of movements in liabilities. The in year service cost
has been reflected in the Income and Expenditure Account.
In addition to the disclosure contained in the primary statements, the following disclosures are in accordance with that
standard.
Financial assumptions:
The major financial assumptions used in the valuation were:
31st March 2007 31st March 2006
Rate of inflation 3.1% 2.9%
Rate of increase in salaries 4.85% 4.65%
Rate of increase in pensions 3.1% 2.9 %
Discount rate 5.4% 4.9%
The assumptions used by the actuary are chosen from a range of possible actuarial assumptions, which due to the
timescales covered may not be borne out in practice.
Scheme assets:
The fair value of the schemes assets which are not intended to be realised in the short term and may be subject to
significant change before they are realised, and the present value of the schemes liabilities, which are derived from
cash flow projections over long periods and thus inherently uncertain were:
As at 31st March 2007 As at 1st April 2006
Expected
rate of return
£000
Expected
rate of return
£000
Equities 7.5% 144,233 7.0% 122,967
Government bonds 4.7% 14,306 4.3% 11,481
Other bonds 5.4% 8,035 4.9% 7,987
Property 6.5% 10,386 6.0% 8,486
Cash/liquidity 5.25% 10,190 4.5% 10,316
Other 7.5% 8,819 7.0% 5,158
Total market value of
assets
195,969 166,395
Actuarial value of liabilities (243,716) (224,844)
Deficit in the scheme (47,747) (58,449)
Related deferred tax asset - -
Net pension liability (47,747) (58,449)
64 | Cafcass Annual Report and Accounts 2006–07