Annual Report and Accounts 2012/13 - Royal Bournemouth Hospital

Financial Accountsemployer representatives as deemedappropriate.The next formal valuation to be used forfunding purposes will be carried out at asat March 2012 and will be used to informthe contribution rates to be used from 1April 2015.Scheme provisionsThe NHS Pension Scheme provideddefined benefits, which are summarisedbelow. This list is an illustrative guideonly, and is not intended to detail all thebenefits provided by the Scheme or thespecific conditions that must be metbefore these benefits can be obtained:The Scheme is a “final salary” scheme.Annual pensions are normally based on1/80th for the 1995 section and of thebest of the last three years pensionablepay for each year of service, and 1/60thfor the 2008 section of reckonable payper year of membership. Memberswho are practitioners as defined by theScheme Regulations have their annualpensions based upon total pensionableearnings over the relevant pensionableservice.With effect from 1 April 2008 memberscan choose to give up some of theirannual pension for an additional tax freelump sum, up to a maximum amountpermitted under HMRC rules. Thisnew provision is known as “pensioncommutation”.Annual increases are applied to pensionpayments at rates defined by thePensions (Increase) Act 1971, and arebased on changes in retail prices in thetwelve months ending 30 September inthe previous calendar year. From 2011-12 the Consumer Price Index (CPI) will beused to replace the Retail Prices Index(RPI).Early payment of a pension, withenhancement, is available to membersof the scheme who are permanentlyincapable of fulfilling their dutieseffectively through illness or infirmity.A death gratuity of twice final year’spensionable pay for death in service, andfive times their annual pension for deathafter retirement is payableFor early retirements other than thosedue to ill health the additional pensionliabilities are not funded by the scheme.The full amount of the liability for theadditional costs is charged to theemployer.Members can purchase additional servicein the NHS Scheme and contributeto money purchase AVC’s run by theScheme’s approved providers or byother Free Standing Additional VoluntaryContributions (FSAVC) providers.1.4 Expenditure on other goodsand servicesExpenditure on goods and services isrecognised when, and to the extentthat they have been received, and ismeasured at the fair value of those goodsand services. Expenditure is recognisedin operating expenses except where itresults in the creation of a non-currentasset such as property, plant andequipment.1.5 Property, plant andequipmentRecognitionProperty, plant and equipment iscapitalised where:l it is held for use in delivering servicesor for administrative purposes;l it is probable that future economicbenefits will flow to, or servicepotential be provided to, theFoundation Trust;l it is expected to be used for more thanone financial year;l the cost of the item can be measuredreliably;l the item individually has a cost of atleast £5,000; orl collectively, a group of items have acost of at least £5,000 and individuallyhave a cost of more than £250,where the assets are functionallyinterdependent, they have broadlysimultaneous purchase dates, are24Annual Report and Accounts 2012/13