The group operates a defined contribution Group Personal Pension Plan in the UK for which the pension cost charge for the year amounted to £1,595,000 (2013 - £1,137,000).
The group historically operated defined contribution schemes and a defined benefit scheme in The Netherlands.
On 1 January 2014, the defined benefit scheme was converted into a defined contribution scheme.
The total pension contributions paid during the year to both the defined benefit and the defined contribution schemes in The Netherland were £1,191,000 (2013 - £1,056,000).
Subsequent to year end, on 12 June 2014, the entire issued share capital of SCC Services BV (formerly SCH Nederland BV) was sold to Systemax Inc. (see note 2). The pension schemes were transferred to the acquirors. No disclosures have been provided in relation to the defined benefit scheme for the period from 1 April 2012 to 1 January 2014.
RIGBY GROUP (RG) PLC AND SUBSIDIARY UNDERTAKINGS
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2014
75
32 PENSION ARRANGEMENTS (continued) Defined benefit scheme
On 25 June 2013, the group acquired Exeter and Devon Airport Limited (“EDAL”).
EDAL operates a defined benefit scheme in the UK. A full actuarial valuation was carried out at 31 December 2012 and updated to 31 March 2014 by a qualified actuary, independent of the scheme’s sponsoring employer. The major assumptions used by the actuary are shown below.
Details have been provided of the movements between 26 June 2013 and 31 March 2014.
EDAL paid contributions of £15,000 per month up to 30 June 2013 and 17.2% of pensionable salary
thereafter. Member contributions were paid in addition at the rate of 6.5% of pensionable salary. In addition, the employer will meet the costs of levies to the Pension Protection Fund, insurance premium for death in service benefits and management and administration expenses. A new schedule of contributions following the valuation as at 31 March 2014 is effective from 1 July 2014 under which recovery contribution will be paid at the rate of £5,000 per month increasing by 3% each 1 April.
Present values of scheme liabilities, fair value of assets and deficit
31 March 2014 £’000 26 June 2013 £’000
Fair value of the scheme assets 10,098 9,616 Present value of scheme liabilities (10,903) (11,329)
Deficit in scheme and liability to be recognised (805) (1,713)
Deferred tax asset 161 343
Net asset liability to be recognised (644) (1,370)
Reconciliation of opening and closing balances of the present value of the scheme liabilities
Period ended 31 March 2014 £’000
Scheme liabilities at start of period 11,329
Current service cost 129
Interest cost 371
Contributions by scheme participants 61
Actuarial gains (852)
Benefits paid (135)
RIGBY GROUP (RG) PLC AND SUBSIDIARY UNDERTAKINGS
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2014
32. PENSION ARRANGEMENTS (continued)
Reconciliation of opening and closing balances of the fair value of scheme assets
Period ended 31 March 2014 £’000
Fair value of scheme assets at 26 June 2013 9,616
Expected return on scheme assets 268
Actuarial gains 56
Contributions by the employer 232
Benefits paid (135)
Contributions by scheme participants 61
Fair value of scheme assets at end of period 10,098
The actual return on the scheme assets over the period 26 June 2013 to 31 March 2014 was £324,000.
Total expense recognised in profit and loss account
Period ended 31 March 2014 £’000
Current service cost 129
Interest cost 371
Expected return on scheme assets. (268)
Total expense recognised in profit and loss account 232 EDAL paid contributions of £232,000 to the scheme during the period 26 June 2013 to 31 March 2014.
RIGBY GROUP (RG) PLC AND SUBSIDIARY UNDERTAKINGS
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2014
77
32. PENSION ARRANGEMENTS (continued) Statement of total recognised gains and losses
Period ended 31 March 2014 £’000
Difference between expected and actual return on scheme assets - gain 56 Experience gains and losses arising on the scheme liabilities – gain 262 Effects of changes in the demographic and financial assumptions underlying the
present value of the scheme liabilities – gain 590
Total gain recognised in statement of total recognised gains
and losses before deferred tax 908
Deferred tax (182)
Total gain recognised in statement of total recognised gains and losses 726 The cumulative amount of actuarial gains and losses recognised in the statement of total
recognised gains and losses since adoption of FRS17 was a gain of £726,000.
Assets 31 March 2014 £’000 Equity 2,197 Bonds 1,766 Cash 6,135 Total assets 10,098
None of the fair value of the assets shown above include any of the employer’s own financial instruments or property occupied by, or other assets used by, the employer.
RIGBY GROUP (RG) PLC AND SUBSIDIARY UNDERTAKINGS
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2014
32. PENSION ARRANGEMENTS (continued) Assumptions 26 June and 31 March 2014 £’000 Rate of discount 4.30 Inflation (RPI) 3.50 Inflation (CPI) 2.80 Salary increases 2.80
Allowance for revaluation of deferred
pensions of CPI or 5% p.a. if less 2.80
Allowance for revaluation of deferred
pensions of CPI or 2.5% p.a. if less 2.50 Allowance for pension payment in payment
increases of RPI or 5% p.a. if less 3.40 Allowance for commutation of pension
for cash at retirement
75% of Post a Day (Commutation Factor: 13:1
Male at 65) The mortality assumptions at 31 March 2014 imply the following life expectancies:
Life expectancy at age of 65 (years) Male retiring in 2014 22.5 Female retiring in 2013 24.8 Male retiring in 2034 24.2 Female retiring in 2034 26.7
Expected long term rates of return
The long-term expected rate of return on cash and bonds is determined by reference to UK long dated government and corporate bonds yields at the balance sheet date. The long-term expected rate of return on bonds with an allowance for out-performance.
The expected long-term rates of return applicable for each period are as follow:
Period commencing 1 January 2013 % per annum Equity 6.70 Bonds 4.40 Cash 2.50
RIGBY GROUP (RG) PLC AND SUBSIDIARY UNDERTAKINGS
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2014
79
32. PENSION ARRANGEMENTS (continued)
Whilst EDAL was only acquired by the group on 25 June 2013, historical results for the pre-acquisition period are presented for comparative and illustrative purposes only.
Amounts for the current and previous four year 31 March 2014 £’000 31 December 2012 £,000 31 December 2011 £000 31 December 2010 £’000 31 December 2009 £’000
Fair value of scheme assets 10,098 9,450 8,877 8,879 9,475 Present value of scheme liabilities (10,903) (11,043) (9,770) (9,079) (10,273)
Deficit in scheme (805) (1,593) (893) (200) (798) Experience adjustment on scheme
assets 93 115 (292) (437) (328)
Experience adjustment on scheme
liabilities 437 353 13 1,206 162
The best estimate of contributions to be paid by the company to the scheme for the period commencing 1 April 2014 is £45,000.
RIGBY GROUP (RG) PLC AND SUBSIDIARY UNDERTAKINGS