BT 2015 Annual Report Download - page 178

176 BT Group plc
Annual Report 2015
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a Based on accrued benefits to date.
Forecast benefits payable by the BTPS at 31 March 2015 (unaudited)
£bn £bn
0
1.0
0.5
1.5
3.0
2.5
2.0
0
20
10
30
60
50
40
2015 2035 2055 2075 2095
Forecast benefits payable by the BTPSa
Liabilitiesa
Forecast benefit payments (Left axis) Liabilities (Right axis)
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he e financial assuptions used to easure the liabilities of the  under  19 are shown below.
oinal rates per ear eal rates per eara
At 31 March
2015
%
2014
%
2013
%
2015
%
2014
%
2013
%
Rate used to discount liabilities 3.25 4.25 4.20 0.39 0.97 0.87
nation  increase in  2.85 3.25 3.30 – – –
nation  increase in  1.85b2.50c2.55c 1.0b0.c0.c
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b$VVXPHGWREHORZHUDIWHU0DUFK
c$VVXPHGWREHORZHUDIWHU0DUFK
Rate used to discount liabilities
IAS 19 requires that the discount rate is determined by reference to market yields at the reporting date on high quality corporate bonds. The currency
and ter of these should be consistent with the currenc and estiated ter of the pension obliations. he discount rate at 1arch 01 is
based on a aret-based  corporate bond ield curve allowin for the future epected benefit paents fro the .
nation  increases in  and 
alar increases are assued to be alined with  ination whilst benefits are assued to increase b either  or  ination as prescribed b
the rules of the  and suarised above. he assuption for  has been assessed b reference to ields on lon-ter fied and inde-lined
overnent bonds and an of nland published inationar epectations.  is assessed at a arin below  tain into account aret
forecasts and independent estiates of the lon-ter dierence.
Longevity
The average life expectancy assumptions, after retirement at 60 years of age, are as follows.
At 31 March
2015
Number of
years
2014
Number of
years
Male in lower pay bracket 26.0 26.0
Male in medium pay bracket 27.3
Male in higher pay bracket 28.7 27.7
Female in lower pay bracket 28.7 28.5
Female in higher pay bracket 29.0
Average improvement for a member retiring at age 60 in 10 years’ time 1.0 1.0
The assumptions about life expectancy have regard to information published by the UK actuarial profession’s Continuous Mortality Investigation.
However, due to the size of the membership of the BTPS it is considered appropriate for the adopted life expectancy assumptions to take into account
the actual membership experience of the scheme. Allowance is also made for future improvements in mortality. The BTPS actuary undertakes formal
reviews of the membership experience at every triennial valuation.
Sensitivity analysis of the principal assumptions used to measure BTPS liabilities
he assuptions on the discount rate ination salar increases and life epectanc all have a sinificant eect on the easureent of schee
liabilities. he table below provides an indication of the sensitivit of the 19 pension liabilities at 1 arch 01 and of the incoe stateent
chare for 011 to chanes in these assuptions.
There may also be a move in the assets from changes in conditions. The total expected impact to liabilities and assets is illustrated as the sensitivity of
the deficit. or eaple the life epectanc scenario incorporates the epected oveent in the value of the lonevit hede.