Barclays 2006 Annual Report Download - page 268

Notes to the accounts
For the year ended 31st December 2006
Barclays PLC
Annual Report 2006
264
60 Differences between IFRS and US GAAP accounting principles (continued)
(c) Pensions and post-retirement benefits (continued)
For those pension schemes with an accumulated benefit obligation in excess of plan assets:
2006
Post-
retirement
Pensions benefits
£m £m
Projected benefit obligation 237 128
Accumulated benefit obligation 227 128
Fair value of plan assets 203 –
For those pension schemes with a projected benefit obligation in excess of plan assets:
2006
Post-
retirement
Pensions benefits
£m £m
Projected benefit obligation 17,603 –
Accumulated benefit obligation 15,037 –
Fair value of plan assets 16,119 –
A long-term strategy has been set for the pension plan asset allocation 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 will be more volatile than
others. One of the factors in the choice of a long-term strategy is to ensure that the investments are adequately diversified. The 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 table below shows the percentage of the fair value of each major category as at the measurement date.
Barclays Capital Retirement Plan UKRF (defined benefits only)
Target Target
2006 31/12/06 31/12/05 2006 30/09/06 30/09/05
%%%%%%
Equity securities 50-70 60 61 45.75 44 50
Debt securities 30-50 38 39 42.25 39 35
Property 0-10 – – 10.00 13 11
All other assets 0-10 2 – 2.00 4 4
Total 100 100 100 100 100 100
The expected return on assets is determined by calculating a total return estimate based on a weighted average of estimated returns for each
asset class. Asset class returns are estimated using current and projected economic and market factors such as inflation, credit spreads and equity
risk premiums.
The Group is expected to make contributions of £351m to the UKRF scheme in 2007 and £20m to the Barclays Capital schemes in 2007.
Estimated future benefit payments
The following benefit payments, which reflect future service, as appropriate, are expected to be paid:
Post-
retirement
Pensions benefits
£m £m
2007 474 5
2008 491 5
2009 511 5
2010 531 6
2011 549 6
Years 2012 – 2016 3,168 31