The scheme is classified as a ‘last-man standing arrangement’. Therefore the association is potentially liable for other participating
employers’ obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme.
Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from
the scheme.
A full actuarial valuation for the scheme was carried out with an effective date of 30 September 2014. This actuarial valuation was certified
on 23 November 2015 and showed assets of £3,123m, liabilities of £4,446m and a deficit of £1,323m. To eliminate this funding shortfall,
the trustees and the participating employers have agreed that additional contributions will be paid, in combination from all employers, to
the scheme as follows:
Deficit contributions
Tier 1
£40.6m per annum
From 1 April 2016 to 30 September 2020:
(payable monthly and increasing by 4.7% each year on 1st April)
Tier 2
From 1 April 2016 to 30 September 2023:
£28.6m per annum
(payable monthly and increasing by 4.7% each year on 1st April)
Tier 3
From 1 April 2016 to 30 September 2026:
£32.7m per annum
(payable monthly and increasing by 3.0% each year on 1st April)
Tier 4
From 1 April 2016 to 30 September 2026:
£31.7m per annum
(payable monthly and increasing by 3.0% each year on 1st April)
Note that the scheme’s previous valuation was carried out with an effective date of 30 September 2011; this valuation was certified on
17 December 2012 and showed assets of £2,062m, liabilities of £3,097m and a deficit of £1,035m. To eliminate this funding shortfall,
payments consisted of the Tier 1, 2 & 3 deficit contributions.
Where the scheme is in deficit and where the association has agreed to a deficit funding arrangement, the association recognises a liability
for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that
relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount
rate is recognised as a finance cost.
Present values of provision
31-Mar-16 31-Mar-15 31-Mar-14
£’000 £’000 £’000
Present value of provision
1,363
1,450
945
Financial Statements 2016
101