Barclays 2006 Annual Report Download - page 211

Barclays PLC
Annual Report 2006 207
Financial statements
3
Notes
(a) The expected return by asset class is based on the portfolio of assets, after considering the net impact of derivatives with a notional of £1,565m (2005: £281m).
(b) Excludes £613m (2005: £512m) representing the money purchase assets of the UKRF.
35 Retirement benefit obligations (continued)
Assets
A long-term strategy has been set for the asset allocation of the UKRF which comprises a mixture of equities, bonds, property and other appropriate
assets. This recognises that different asset classes are likely to produce different long-term returns and some asset classes may be more volatile
than others.
The long-term strategy ensures that investments are adequately diversified. Asset managers are permitted some flexibility to vary the asset
allocation from the long-term strategy within control ranges agreed with the trustee from time to time.
The UKRF also employs derivative instruments, where appropriate, to achieve a desired exposure or return, or to match assets more closely
to liabilities.
The value of the assets of the schemes, their percentage in relation to total scheme assets, and their expected rate of return at 31st December 2006
and 31st December 2005 were as follows:
2006
UK schemes Overseas schemes Total
% of Expected % of Expected % of Expected
total fair rate total fair rate total fair rate
value of of value of of value of of
Value scheme return Value scheme return Value scheme return
£m assets % £m assets % £m assets %
UK equities 2,099 12.5 7.9 13 1.7 7.4 2,112 12.0 7.9
US equities 1,815 10.8 7.9 86 11.5 7.4 1,901 10.9 7.9
Other equities 3,371 20.1 7.9 238 32.0 10.0 3,609 20.6 8.0
UK government bonds 3,309 19.8 4.4 – – – 3,309 18.9 4.4
UK corporate bonds 2,134 12.7 4.9–––2,13412.2 4.9
Other bonds 1,487 8.9 4.9 300 40.3 6.2 1,787 10.3 5.1
Property 1,995 11.9 6.4 15 2.0 13.4 2,010 11.5 6.5
Derivatives(a) 210.1n/a–––210.1n/a
Cash 293 1.8 4.6 37 5.0 5.9 330 1.9 4.8
Other 237 1.4 5.9 56 7.5 9.4 293 1.6 6.6
Fair value of plan assets(b) 16,761 100 6.3 745 100 7.9 17,506 100 6.4
2005
UK schemes Overseas schemes Total
% of % of % of
total fair Expected total fair Expected total fair Expected
value of rate of value of rate of value of rate of
Value scheme return Value scheme return Value scheme return
£m assets % £m assets % £m assets %
UK equities 2,782 17.9 7.9 13 1.6 7.8 2,795 17.1 7.9
US equities 1,734 11.1 7.9 90 11.0 7.8 1,824 11.1 7.9
Other equities 3,007 19.3 7.9 228 27.8 11.6 3,235 19.7 8.2
UK government bonds 2,729 17.6 4.0 – – – 2,729 16.7 4.0
UK corporate bonds 1,827 11.7 4.6 – – – 1,827 11.1 4.6
Other bonds 899 9.7 4.6 343 41.9 7.0 1,242 7.6 5.3
Property 1,678 10.8 6.2 16 2.0 15.3 1,694 10.3 6.3
Derivatives(a) 1 – n/a 10 1.2 n/a 11 0.1 n/a
Cash 755 4.8 4.0 33 4.0 4.4 788 4.8 4.0
Other 159 1.1 5.5 86 10.5 7.7 245 1.5 6.3
Fair value of plan assets(b) 15,571 100 6.3 819 100 8.6 16,390 100 6.4