Aviva 2013 Annual Report Download - page 207

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
205
Notes to the consolidated financial statements continued
49 – Pension obligations continued
The present value of unfunded post-retirement benefit obligations included in the table above is £118 million at 31 December 2013
(2012: £127 million).
The net surplus in the pension schemes in 2013 was adversely affected by a narrowing of the spread between UK corporate
bond yields and gilt yields. This was partly offset by a variety of factors which increased the surplus, including deficit funding
contributions, positive equity and property market performance, and reductions to future member benefits.
2012 (Restated)1
Fair Value of
Scheme
Assets
£m
Present Value
of defined
benefit
obligation
£m
IAS 19
Pensions net
surplus
£m
Net surplus in the schemes at 1 January 11,791 (10,527) 1,264
Current service costs — (6) (6)
Past service costs
–
curtailment gain — 15 15
Administrative expenses2 — (13) (13)
Total pension cost charged to net operating expenses — (4) (4)
Net interest credited/(charged) to investment income/(finance costs)3 577 (509) 68
Total recognised in income from continuing operations 577 (513) 64
Remeasurements:
Actual return on these assets 611 — 611
Less: Interest income on scheme assets (577) — (577)
Return on scheme assets excluding amounts in interest income 34 — 34
Losses from change in financial assumptions — (914) (914)
Experience losses — (100) (100)
Total remeasurements recognised in other comprehensive income from continuing operations 34 (1,014) (980)
Employer contributions 250 — 250
Employee contributions 2 (2) —
Benefits paid (344) 344 —
Administrative expenses paid from scheme assets2 (13) 13 —
Foreign exchange rate movements (16) 24 8
Net surplus in the scheme at 31 December 12,281 (11,675) 606
1 Following the adoption of the revised IAS 19 “Employee Benefits”, the Group has retrospectively applied the changes to the comparative periods. The key impact of the standard is the replacement of interest cost on the defined
benefit obligation and the expected return on plan assets with a net interest cost based on the net defined benefit asset or liability and the discount rate at the beginning of the year. This has resulted in an increase of £150 million
recognised in income and a corresponding decrease in remeasurements recognised in other comprehensive income.
2 Administrative expenses are expensed as incurred.
3 Net interest income of £87 million has been credited to investment income and net interest expense of £19 million has been charged to finance costs (see Note 8).
4 Total recognised in income from discontinued operations is £nil and total remeasurements recognised in other comprehensive income from discontinued operations is £nil.
(ii) Scheme assets
Scheme assets are stated at their fair values at 31 December 2013. Total scheme assets are comprised in the UK, Ireland and
Canada as follows:
2013 2012
UK
£m
Ireland
£m
Canada
£m
Total
£m
UK
£m
Ireland
£m
Canada
£m
Total
£m
Bonds1
Fixed interest government 1,500 139 69 1,708 1,601 130 76 1,807
Fixed interest corporate 2,776 10 60 2,846 2,595 14 45 2,654
Index-linked 4,502 112 — 4,614 4,492 116 — 4,608
Equities 900 99 81 1,080 909 87 92 1,088
Property 1,074 13 — 1,087 914 12 — 926
Cash 518 1 21 540 514 44 13 571
Derivatives 225 55 — 280 386 1 — 387
Other1 239 2 2 243 236 2 2 240
Total fair value of assets 11,734 431 233 12,398 11,647 406 228 12,281
1 £179 million of transferrable insurance policies with other Group companies in the UK, previously disclosed within bonds, has been reclassified to other assets for 2012.
Total scheme assets are analysed by those that have a quoted market price in an active market and those that do not as follows:
2013 2012
Total
Quoted
£m
Total
Unquoted
£m
Total
£m
Total
Quoted
£m
Total
Unquoted
£m
Total
£m
Bonds1
Fixed interest government 808 900 1,708 1,566 241 1,807
Fixed interest corporate 10 2,836 2,846 7 2,647 2,654
Index-linked 3,864 750 4,614 2,698 1,910 4,608
Equities 409 671 1,080 484 604 1,088
Property — 1,087 1,087 — 926 926
Cash 540 — 540 571 — 571
Derivatives 88 192 280 15 372 387
Other1 — 243 243 — 240 240
Total fair value of assets 5,719 6,679 12,398 5,341 6,940 12,281
1 £179 million of transferrable insurance policies with other Group companies in the UK, previously disclosed within bonds, has been reclassified to other assets for 2012.