BT 2014 Annual Report Download - page 161
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158 Financial statements
19. Retirement beneƬt plans continued
The results of the two most recent triennial valuations which have been performed using the same methodology are shown below.
June
2011
valuation
£bn
December
2008
valuation
£bn
BTPS liabilities (40.8) (40.2)
Market value of BTPS assets 36.9 31.2
Funding decit (3.9) (9.0)
Percentage of accrued benets covered by BTPS assets at valuation date 90.4% 77.6%
Percentage of accrued benets on a solvency basis covered by the BTPS assets at the valuation date 66.0% 57.0%
The reduction of the funding decit in the period from 31 December 2008 to 30 June 2011 reects an increase in scheme assets due to decit
contribution payments totalling £1.6bn and strong investment performance of 10.1% per year. The liabilities increased due to a lower discount rate
which was partly oset by the impact of the announcement in July 2010 by the Government that CPI, rather than RPI, will be used as the basis for
determining the rate of ination for the statutory minimum rate of revaluation and indexation of occupational pension rights.
Key assumptions – funding valuation
These valuations were determined using the following prudent long-term assumptions.
Nominal rates (per year) Real rates (per year)a
June
2011
valuation
%
December
2008
valuation
%
June
2011
valuation
%
December
2008
valuation
%
Discount rate
–pre-retirement liabilities 6.35 6.76 3.05 3.65
– post-retirement liabilities 4.90 5.21 1.65 2.15
Average long-term increase in RPI and future increases in wages and salaries 3.20 3.00 – –
Average long-term increase in CPI 2.20 n/a (1.0) n/a
a The real rate is calculated relative to RPI inƮation and is shown as a comparator.
The average life expectancy assumptions, after retirement at 60 years of age, are as follows.
At date of valuation
June
2011
valuation
Number of
years
December
2008
valuation
Number of
years
Male in lower pay bracket 26.0 25.5
Male in higher pay bracket 27.8 27.7
Female 28.5 28.3
Average improvement for a member retiring at age 60 in 10 years’ time 1.2 1.1
Payments made to the BTPS
Year ended 31 March
2014
£m
2013
£m
Ordinary contributions 205 207
Decit contributions 325 325
Total contributions in the year 530 532
The group expects to contribute approximately £495m to the BTPS in 2014/15, comprising ordinary contributions of approximately £200m and
decitcontributions of £295m.