National Grid 2008 Annual Report Download - page 595

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 36123
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 73
Description: EXHIBIT 15.1
0/7269.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/269/7*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 36123
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 73 Description: EXHIBIT 15.1
0/7269.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/269/7*
Table of Contents
Annual Report and Accounts 2007/08
81
The amounts recorded in the balance sheet are based on
accounting standards which require pension obligations to
be calculated on a different basis to that used by the
actuaries to determine the funding we need to make into
each arrangement.
Other than the acquisition of KeySpan, which resulted in us
assuming pension and other post-retirement obligations in
connection with current and past employees of KeySpan, the
principal movements in net pension obligations during the
year arose as a consequence of actuarial gains on plan
liabilities, principally as a consequence of using higher
discount rates to calculate the present value of these
obligations. This was partially offset by actuarial losses on
the value of plan assets.
Actuarial position
The last completed full actuarial valuation of the National
Grid UK Pension Scheme was as at 31 March 2006. This
concluded that the pre-tax funding deficit was £371 million in
the defined benefit section on the basis of the funding
assumptions. Employer cash contributions for the ongoing
cost of this plan are currently being made at a rate of 32.7%
of pensionable payroll.
The last completed full actuarial valuation of National Grid
Electricity Supply Pension Scheme was as at 31
March 2007. This concluded that the pre-tax funding deficit
was £405 million on the basis of the funding assumptions.
Employer cash contributions for the ongoing cost of this plan
are currently being made at a rate of 20.5% of pensionable
payroll, with administration fees paid in addition.
Contributions
In addition to ongoing employer contributions we have
agreed to make additional deficit contributions to certain of
the above plans as follows:
In accordance with our funding policy for US pension and
other post-retirement benefit plans we expect to contribute
approximately £268 million to these plans during 2008/09.
National Grid UK Pension Scheme: The actuarial
valuation as at 31 March 2007 is currently in progress but
has not yet been concluded. In advance of finalising the
valuation we have made deficit contributions of
£115 million during 2007/08 and £250 million in
April 2008. We and the trustees are currently in the
process of agreeing a recovery plan in respect of the
deficit expected to be included in the valuation; and
National Grid Electricity Supply Pension Scheme: we have
made deficit contributions of £40 million during 2007/08
and £60 million in April 2008. Further deficit payments of
£2.5 million will be paid monthly from 1 April 2008 to 31
March 2009, in line with the a
g
reed scheme recovery plan.
We expect to pay £90.5 million in early 2009/10, with the
remaining deficit payable monthly from April 2012 to
March 2017.
Plan assets
Our plans in both the UK and the US are trustee
administered and the trustees are responsible for setting the
investment strategy and monitoring investment performance,
consulting with us where appropriate.
At 31 March 2008 plan assets totalled £17,273 million (2007:
£15,999 million) invested as follows: