Download our latest Annual Report - Bakkavor

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
36
RETIREMENT BENEFIT SCHEMES CONTINUED
Defined benefit schemes
A full actuarial valuation of plan assets and the present value of the defined benefit obligation for funding purposes was carried out at 31 March 2010
and was updated for IAS 19 purposes to 29 December 2012 by a qualified independent actuary. The projected unit cost method was used to value the
liabilities and was conducted by a qualified independent actuary with Towers Watson Limited.
The major assumptions used in this IAS 19 valuation were:
29 December 31 December
2012 2011
Expected rate of salary increases – –
Future pension increases 2.90% 2.95%
Expected return on scheme assets 5.80% 6.25%
Discount rate applied to scheme liabilities 4.60% 5.00%
Inflation assumption (CPI) 1.95% 2.00%
The mortality table is based on scheme specific postcode fitted SAPS tables with a 102% multiplier for male members and 108% multiplier for female
members. Long cohort improvements are applied from 2002 to 2010. Future improvements are in line with CMIB improvements with a 1.0% pa long
term trend, giving life expectancies as follows:
Males expected Males expected Females expected Females expected
future lifetime future lifetime future lifetime future lifetime
2012 2011 2012 2011
Member aged 45 in 2010 41.7 41.6 44.0 43.9
Member aged 65 in 2010 22.2 22.1 24.1 24.1
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:
Approximate impact
Assumption Change in assumption on scheme liabilities
Discount rate Increase/decrease by 0.1% Decrease/increase by 1.5% – 2.0%
Rate of inflation Increase/decrease by 0.1% Increase/decrease by 0.5% – 1.5%
Rate of salary growth N/A N/A
Rate of mortality Increase by 1 year Increase by 3%
Amounts recognised in income in respect of these defined benefit schemes are as follows:
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Current service cost – (1.1)
Interest cost (7.9) (9.0)
Expected return on scheme assets 9.7 11.7
Gain from curtailments – 12.0
Total credit 1.8 13.6
All of the credits for each period presented have been included in total administrative expenses, except for the gain from curtailments recorded in
2011, which is shown within exceptional items. Actuarial gains and losses have been reported in other comprehensive income. At 31 March 2011 the
scheme closed to future accrual and this has been allowed for in the liability calculations. The closure of the scheme led to a £12.0 million credit to the
income statement in the prior period and is disclosed within exceptional items.
The actual return on scheme assets was a £18.4 million gain (2011: £4.8 million loss).
Cumulative amount of actuarial gains and losses recognised in other comprehensive income since the date of IFRS transition is £49.1 million loss
(2011: £45.2 million loss).
PAGE 96 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM