notes to the financial statements
for the year ended 31st March 2009
14 PENSION COMMITMENTS
The Board participates in the defined benefit schemes administered by hampshire county council and Kent county council and also operates two defined
contribution schemes. Tourism South East is not a trustee of either scheme and has no control over investment decisions made by their administrators. The
respective costs of these schemes are as follows:
2009
2008
£000
£000
defined benefit schemes (charged to operating deficit)
94
190
defined benefit schemes (charged to other finance charges)
79
6
defined contribution schemes (charged to operating deficit)
14
17
defined benefit schemes charged / (credited) to statement of total recognised
gains and losses)
1,837
(
1,079 )
2,024
(
866 )
at 31st March 2009 contributions of £121,000 (2008: £121,000) by the Board were outstanding in respect of one of the defined benefit schemes and are included
within creditors.
The last full actuarial assessments of both local authority funds were carried out by qualified independent actuaries at 31st March 2007 when the market value
of the Board’s share of assets within the hampshire county council Scheme was £4,301,000, equivalent to a funding level of 74%. To spread this deficit over
employees’ expected remaining service lives the Board, on actuarial advice, is paying contribution rates of 18.1% and 18.6% for the years ended 31st March
2008 and 2009 respectively and is paying a rate of 19.1% for the year ending 31st March 2010. From the 1st april 2008 the employees are paying between 5.5%
and 7.5%. at 31st March 2007 the market value of the Board’s share of assets within the Kent county council scheme was £2,338,000, equivalent to a funding
level of 85%. To spread this deficit over employees’ expected remaining service lives the Board, on actuarial advice, is paying contribution rates of 21.5% plus
£46k and 21.5% plus £48k for the years ended 31st March 2008 and 2009 respectively and is paying a rate of 21.5% plus £50k for the year ending 31st March
2010. From the 1st april 2008 the employees are paying between 5.5% and 7.5%.
The valuations have been updated by the actuaries to take account of the requirements of FrS 17 in order to assess the liabilities of the Funds as at 31st
March 2009. Liabilities are valued on an actuarial basis using the projected unit method which assesses the future liabilities discounted to their present value.
Assumptions
The main assumptions used by the actuaries are as follows:
Hampshire County Council Kent County Council FundFund2009
2008
2007
2006
2009
2008
2007
2006
% pa
% pa
% pa
% pa
% pa
% pa
% pa
% pa
discount rate
6.6
6.8
5.3
4.9
6.9
6.9
5.4
4.9
rate of increase in salaries
5.1
5.2
4.7
4.5
4.6
5.1
4.7
4.6
rate of increase in pensions in payment
and deferred pensions
3.6
3.7
3.2
3.0
3.1
3.6
3.2
3.1
rate of inflation
3.6
3.7
3.2
3.0
3.1
3.6
3.2
3.1
Long term expected rates of return on:
Equities
7.0
7.6
7.7
7.3
7.0
7.7
7.8
7.4
Bonds
4.0
4.6
4.8
4.3
5.4
5.7
4.9
4.6
Property
6.0
6.6
6.7
6.3
4.9
5.7
5.8
5.5
Other assets
1.6
6.0
5.6
4.6
4.0
4.8
4.9
4.6
average long term expected rate of return
5.7
6.7
6.9
6.5
6.3
7.0
7.0
6.6
The deterioration in balance sheet position of the fund is almost entirely as a result of poor investment returns (around minus 20%) over the year.
Assets
assets are valued at fair value, principally market value for investments, and are analysed as follows:
Hampshire County Council FundKent County Council Fund2009
2008
2007
2006
2009
2008
2007
2006
£000
£000
£000
£000
£000
£000
£000
£000
Equities
2,006
2,846
2,892
2,845
1,138
1,506
1,837
1,789
Bonds
1,137
1,221
1,005
833
293
304
325
320
Property
265
265
195
161
155
234
268
230
Other
226
263
221
274
138
124
189
190
3,634
4,595
4,313
4,113
1,724
2,168
2,619
2,529
Hampshire County Council FundKent County Council Fund2009
2008
2007
2006
2009
2008
2007
2006
£000
£000
£000
£000
£000
£000
£000
£000
Net pension liability:
Share of assets
3,634
4,595
4,313
4,113
1,724
2,168
2,619
2,529
Estimated funded
liabilities
(5,775 )
(
5,216 )
(
5,813 )
(
5,531 )
(2,527 )
(
2,636 )
(
3,222 )
(
3,332 )
(2,141 )
(
621 )
(
1,500 )
(
1,418 )
(803 )
(
468 )
(
603 )
(
803 )
22
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