Keele statement of accounts 20/21 | Page 56

Keele University
Notes to the Accounts For the year ended 31 July 2021
21 Creditors : amounts falling due after more than one year ( continued ) The loans are all held by the University , with no loan facilities in the subsidiary companies . As at 31 July 2021 , the loans comprise of the following :
Lender
Term
Balance
Interest rate
£’ 000
%
Royal Bank of Scotland
2029
2,821
LIBOR hedged at 5.22 % plus agreed margin
Royal Bank of Scotland
2029
2,000
9.19 % fixed
Royal Bank of Scotland
2029
2,037
LIBOR plus agreed margin
National Westminster Bank ( Revolving credit facility )
2024
-
LIBOR plus agreed margin
Barclays Bank
2035
9,310
Mix of 6.885 % fixed and LIBOR plus agreed margin
Barclays Bank ( Revolving credit facility )
2022
-
Variable rate plus 1.25 % margin
Lloyds Bank
2034
5,625
Mix of 5.715 % fixed and LIBOR plus agreed margin
Barings Bank
2037 / 2042
45,000
3.27 % Series A and 3.37 % Series B Senior Notes
Total 66,793
21 ( b ) Keele Residential Funding premium
The Keele Residential Funding premium represents the premiums received on the lease of student accommodation to Keele Residential Funding plc . The premiums are held as deferred income in creditors and are being released on a straight-line basis over the period of the lease agreements .
22 Provisions for liabilities Consolidated and University
Obligation to fund deficit on pensions for :
USS
KSS
LGPS
Total Pensions
Provisions
Pay and severances
Other provisions
Total Other Provisions
£’ 000
£’ 000
£’ 000
£’ 000
£’ 000
£’ 000
£’ 000
At 1 August 2020
28,019
40,142
715
68,876
868
-
868
Utilised in year
-
-
-
-
( 868 )
-
( 868 )
Transfer from statement of comprehensive income
( 2,201 )
( 1,874 )
( 715 )
( 4,790 )
-
-
-
University deficit contributions
-
( 1,447 )
-
( 1,447 )
-
-
-
Additions
-
-
-
-
859
-
859
At 31 July 2021 25,818 36,821 - 62,639 859 - 859
USS deficit
The obligation to fund the past deficit on the Universities Superannuation Scheme ( USS ) arises from the contractual obligation with the USS to deficit payments in accordance with the deficit recovery plan . In calculating this provision , management have estimated future staff levels within the USS scheme for the duration of the contractual obligation and salary inflation . Key assumptions are set out below and further information is provided in note 32 .
Following the completion of the 2018 actuarial valuation , a deficit recovery plan has been agreed of which more detail is given in note 32 . This plan requires deficit payments of 2.0 % of salaries from 1 October 2019 to 30 September 2021 and then payments of 6.0 % of salaries from 1 October 2021 to 31 March 2028 . This recovery plan will be amended following the completion of the 2020 actuarial valuation .
The major assumptions used to calculate the obligation are : 2021 2020
Discount rate
0.88 %
0.73 %
( based on rate issued by Mercers in their workings for the sector through BUFDG )
Salary growth – Year 1
3.00 %
1.50 %
( includes spine and grade point increases , and estimated national pay awards )
Salary growth – Year 2 & on
3.50 %
3.50 %
Sensitivity analysis
As set out in the accounting policies , there are some critical judgements made in estimating the obligation to fund the USS deficit . The sensitivity of the principal assumptions used to measure the USS deficit provision are set out below :
Change in assumptions at 31 July 2021 Approximate impact
0.5 % change in the salary inflation
£ 0.5m
0.5 % change in the staff numbers
£ 0.5m
56
0.5 % change in the discount rate
£ 0.5m
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