Statement of Accounts 2020 / 21
Notes to the Accounts For the year ended 31 July 2021
32 Pension Schemes ( continued )
A new deficit recovery plan was put in place as part of the 2018 valuation , which requires payment of 2.0 % of salaries over the period 1 October 2019 to 30 September 2021 , at which point the rate will increase to 6.0 %. The 2021 deficit recovery liability reflects this plan . The liability figures have been produced using the following assumptions :
2021 2020
Discount rate |
0.88 % |
0.73 % |
Pensionable salary growth - Year 1 |
3.00 % |
1.50 % |
- Year 2 onwards |
3.50 % |
3.50 % |
( ii ) Keele Superannuation Scheme ( KSS )
The KSS is a final salary defined benefit scheme in the United Kingdom that pays out pensions at retirement based on service and final pay , with the assets held in separate trustee-administered funds . The employer cash contribution made for the year ended 31 July 2021 was £ 1,447k ( 2020 : £ 1,363k ), with £ 250k ( 2020 : £ 201k ) of expenses paid by the University on behalf of the Scheme . This includes £ nil ( 2020 : £ nil ) outstanding contributions at the balance sheet date .
In 2013 , it was decided to close KSS to future service benefit accrual and to transfer active members to USS . Therefore , no further contributions by either members or the University have been made in this financial year , with the exception of the deficit funding contributions paid by the University in line with the recovery plan agreed between the University and the KSS Trustees that began in November 2015 .
Assumption The following information is based upon a full actuarial valuation of KSS at 1 August 2017 . The principal financial assumptions used to calculate scheme liabilities under FRS102 are :
At 31 July 2021 |
At 31 July 2020 |
% pa |
% pa |
Discount rate |
1.70 |
1.50 |
Rate of increase in salaries |
3.40 |
3.10 |
Price Inflation ( RPI ) |
3.40 |
3.10 |
Price Inflation ( CPI ) |
2.65 |
2.35 |
Rate of increase of pensions in payment and deferred pensions : Pre 1 August 2001 Service |
4.10 |
4.00 |
1 August 2001 to 30 November 2006 Service |
3.35 |
3.10 |
Post 1 December 2006 Service |
2.15 |
2.05 |
Commutation allowance ( Members commute % of their pension ) 25 % 25 % No allowance has been assumed for early retirement .
The most significant non-financial assumption is the assumed level of longevity . The table below shows life expectancy assumptions ( in years ) used in the accounting assessments based on the life expectancy of male and female members at age 65 .
Current Pensioner aged 65 ( Male ) |
Non-pensioner currently aged 45 ( Male ) |
Current Pensioner aged 65 ( Female ) |
Non-pensioner currently aged 45 ( Female ) |
At 31 July 2021 |
21 |
23 |
23 |
25 |
At 31 July 2020 |
22 |
23 |
23 |
25 |
The actuarial tables used for this are 102 % S2PA with CMI 2018 improvements trending to 1.25 % ( 2020 : 102 % S2PA with CMI 2018 improvements trending to 1.25 %).
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions , which , due to the timescale covered , may not necessarily be borne out in practice .
Scheme assets of KSS The assets in the scheme were :
Fair value as at |
31 July 2021 |
31 July 2020 |
£’ 000 |
£’ 000 |
Equities / Return seeking Funds |
12,873 |
17,226 |
Corporate bonds |
19,474 |
13,330 |
Insured pensioners |
1,402 |
- |
Cash |
30 |
2 |
Total 33,779 30,558 65