NOTES TO THE ACCOUNTS
NOTE 30 – PENSION SCHEMES continued
The principal assumptions used were in accordance with those used by independent qualified actuaries in updating the most recent reviews of the UK schemes for Financial Reporting Standard (FRS 17) purposes as follows: 2011
2010
2009
%
%
%
Discount rate for scheme liabilities
5.3
5.6
6.3
Inflation assumption – RPI
3.5
3.3
3.7
Inflation assumption – CPI
3.0
2.8
N/A
Long-term salary growth increases*
4.2
4.0
4.7
Increases on CARE benefits before retirement (in active service)
3.5
3.3
N/A
Pension payment increases – pre 01/08/10 service
3.0
2.8
3.7
Pension payment increases – post 01/08/10 service
2.3
2.3
N/A
* A lower rate averaging 2% per annum is assumed for the two years immediately following the year-end.
The mortality assumptions are based on standard mortality tables which allow for minimum future mortality improvements. The assumptions are as follows: 2011
2010
2009
Years
Years
Years
Male currently aged 65
20.2
20.1
20.1
Female currently aged 65
22.2
22.2
22.2
Male currently aged 45
22.0
22.0
21.9
Female currently aged 45
23.4
23.4
23.4
Future life expectancies at age 65:
The assets in the scheme and the expected rates of return together with the reconciliation of funded status to the balance sheet were as follows: 31 July 2011 Long-term rate of return expected % p.a. £’000
31 July 2010 Long-term rate of return expected % p.a. £’000
31 July 2009 Long-term rate of return expected % p.a. £’000
Equities
7.9
54,630
8.2
49,073
8.5
40,475
Corporate bonds
5.3
6,896
5.4
5,834
6.0
5,548
Government bonds
3.9
16,461
4.2
13,937
4.0
12,944
Cash/Other
3.5
2,078
3.3
517
4.8
810
6.7
80,065
7.1
69,361
7.2
59,777
Present value of scheme liabilities Pension liability
60
(92,426)
(82,449)
(80,032)
(12,361)
(13,088)
(20,255)
UNIVERSITY OF EXETER:
F I N A N C I A L S TAT E M E N T S F O R T H E Y E A R E N D E D 3 1 J U LY 2 0 1 1