Annual report and accounts 2009 (PDF) - Coventry Building Society

12. PENSION SCHEME (continued)2009 2008£m £mThe amount recognised in the statement of other comprehensive incomeActuarial loss (3.3) (4.3)Tax credit on actuarial loss at 28% (2008 – 28.5%) 0.9 1.2Actuarial loss net of tax (2.4) (3.1)The major categories of plan assets as a percentage of the fair value of total plan assets, and their expected rates of returnare:Expected return at Plan assets Expected return at Plan assetsbalance sheet date at 31.12.2009 balance sheet date at 31.12.2008% % % %Equities 8.0 33 7.4 45Corporate bonds 5.7 25 6.4 28Government bonds 4.5 13 3.9 10Alternatives 6.5 29 5.9 17None of the fund’s assets are invested in the Society (in 2008 this was also nil).100 100To develop the expected long term rate of return on assets assumption, the Society considered the current level of expectedreturns on risk free investments (primarily Government bonds), the historical level of the risk premium associated with theother asset classes in which the portfolio is invested and the expectations for future returns of each asset class. Theexpected return for each asset class, as shown above, was then weighted based on the asset allocation to develop theexpected long term rate of return on assets assumption for the portfolio and then a deduction of 0.14% made for expenses.This resulted in the selection of the 6.2% assumption for 2010.47