Annual report and accounts 2016

150
Notes to the consolidated financial statements continued
32 Employee benefit obligations continued
In the UK, mortality rates are calculated using the standard SAPS mortality tables produced by the CMI for APS and NAPS. The
standard mortality tables were selected based on the actual recent mortality experience of members and were adjusted to allow
for future mortality changes. The current longevities underlying the values of the scheme liabilities were as follows:
Mortality assumptions 2016 2015
Life expectancy at age 60 for a:
– male currently aged 60 28.3 28.3
– male currently aged 40 29.9 29.9
– female currently aged 60 29.9 29.9
– female currently aged 40 32.4 32.3
At December 31, 2016, the weighted-average duration of the defined benefit obligation was 12 years for APS (2015: 12 years) and 20
years for NAPS (2015: 19 years).
For the US PRMB, mortality rates were based on the RP-14 mortality tables.
h Sensitivity analysis
Reasonable possible changes at the reporting date to significant actuarial assumptions, holding other assumptions constant,
would have affected the present value of scheme liabilities by the amounts shown:
Increase in scheme
€ million
liabilities
Discount rate (decrease of 10 basis points) 519
Future salary growth (increase of 10 basis points) 97
Future pension growth (increase of 10 basis points) 393
Future mortality rate (one year increase in life expectancy) 940
Although the analysis does not take into account the full distribution of cash flows expected under the plan, it does provide an
approximation of the sensitivity of the assumptions shown.
i Funding
Pension contributions for APS and NAPS were determined by actuarial valuations made at March 31, 2012 and March 31, 2015
using assumptions and methodologies agreed between the Group and the Trustees of each scheme. At the date of the actuarial
valuation, the actuarial deficits of APS and NAPS amounted to €932 million and €3,818 million respectively. In order to address the
deficits in the schemes, the Group has also committed to the following undiscounted deficit payments:
€ million APS NAPS
Within 12 months 65 356
2-5 years 261 1,423
5-10 years 82 1,779
More than 10 years – 267
Total expected deficit payments for APS and NAPS 408 3,825
The Group has determined that the minimum funding requirements set out above for APS and NAPS will not be restricted. The
present value of the contributions payable is expected to be available as a refund or a reduction in future contributions after they
are paid into the plan. This determination has been made independently for each plan, subject to withholding taxes that would be
payable by the Trustees.
Deficit payments in respect of local arrangements outside of the UK have been determined in accordance with local practice.
In total, the Group expects to pay €683 million in employer contributions and deficit payments to its post-retirement benefit plans
in 2017. This includes expected deficit contributions of €65 million to APS and €356 million to NAPS. This excludes any additional
deficit contributions which may become due depending on the Group’s cash balance at March 31, 2017.
Until September 2019, if British Airways pays a dividend to IAG higher than 35 per cent of its profits it will either provide the
scheme with a guarantee for 100 per cent of the amount above 35 per cent or 50 per cent of that amount as an additional
cash contribution.
British Airways has provided collateral on certain payments to APS which at December 31, 2016 amounted to €296 million
(2015: €343 million).
INTERNATIONAL AIRLINES GROUP
Annual Report and Accounts 2016