Keele statement of accounts 20/21 | Page 64

Keele University

Notes to the Accounts For the year ended 31 July 2021

Other Comprehensive Income - actuarial ( gain ) / loss in respect of pension schemes KSS LGPS

Total actuarial ( gain ) / loss in respect of pension schemes in the Statement of Comprehensive Income and Expenditure

( 3,229 ) 5,719

The pension scheme liability on the Balance Sheet is disclosed in note 22 . ( i ) The Universities Superannuation Scheme ( USS )

The University participates in USS which is the main scheme covering most staff . The Scheme is a hybrid pension scheme , providing defined benefits ( for all members ), as well as defined contribution benefits . The assets of the scheme are held in a separate trustee-administered fund . USS is a multi-employer scheme and is accounted for as set out in the accounting policies .

The total cost charged ( 2020 : credited ) to salaries in the Statement of Comprehensive Income and Expenditure is £ 10,415k ( 2020 : £ 20,982k ). Also , interest was charged of £ 204k ( 2020 : £ 969k ). Deficit recovery contributions due within one year for the University are £ 3,243k ( 2020 : £ 1,215k )

The latest available completed actuarial valuation of the Retirement Income Builder is at 31 March 2018 ( the valuation date ), which was carried out using the projected unit method . A valuation as at 31 March 2020 is underway but not yet complete .

Since the University cannot identify its share of USS Retirement Income Builder ( defined benefit ) assets and liabilities , the following disclosures reflect those relevant for those assets and liabilities as a whole .

The 2018 valuation was the fifth valuation for the scheme under the scheme-specific funding regime introduced by the Pensions Act 2004 , which requires schemes to adopt a statutory funding objective , which is to have sufficient and appropriate assets to cover their technical provisions . At the valuation date , the value of the assets of the scheme was £ 63.7 billion and the value of the scheme ’ s technical provisions was £ 67.3 billion indicating a shortfall of £ 3.6 billion and a funding ratio of 95 %.

The key financial assumptions used in the 2018 valuation are described below . More detail is set out in the Statement of Funding Principles ( https :// www . uss . co . uk / about-us / valuation-and-funding / statement-of-funding-principles ).

Pension increases ( CPI ) - Term dependant rates in line with the difference between the Fixed Interest and Index Linked yield curves , less 1.3 % p . a .

Discount rate ( forward rates ) Years 1-10 : CPI + 0.14 % reducing linearly to CPI – 0.73 % Years 11-20 : CPI + 2.52 % reducing linearly to CPI + 1.55 % by year 21 Years 21 +: CPI + 1.55 %

The main demographic assumption used relates to the mortality assumptions . These assumptions are based on analysis of the Scheme ’ s experience carried out as part of the 2018 actuarial valuation . The mortality assumptions used in these figures are as follows :

2018 valuation

Mortality base table Pre-retirement : 71 % of AMC00 ( duration 0 ) for males and 112 % of AFC00 ( duration 0 ) for females .

Post-retirement : 97.6 % of SAPS S1NMA “ light ” for males and 102.7 % of RFV00 for females .

Future improvements to mortality

The current life expectancies on retirement at age 65 are :

CMI _ 2017 with a smoothing parameter of 8.5 and a long term improvement rate of 1.8 % p . a . for males and 1.6 % p . a . for females .

2021 2020

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