Barclays 2003 Annual Report Download - page 131

4 Pensions, post-retirement benefits and other staff costs (continued)
2003 2002 2001
£m £m £m
Pension costs vary from regular costs as follows (UKRF):
Regular costs 221 197 181
Variation from regular costs (including interest) (90) (266) (250)
131 (69) (69)
Of the total regular cost in 2003 of £221m, £165m relates to the 1964 Pension Scheme, £37m to the RIS and £19m to the PIP. The regular cost in
respect of afterwork, which during 2003 only included new employees from 1st October 2003, was less than £1m.
The approach taken to calculating the pension charge in the accounts for the 1964 Pension Scheme is to take assets and liabilities at market values
with effect from 1st January 2003. The assumptions used to derive the 1964 Pension Scheme pensions charge differ from those shown above in that
returns on new investments are assumed to be 6.5% p.a., dividend growth is assumed to be 4.3% p.a and future price inflation is assumed to be
2.3% p.a. A discount rate at 1st January 2003 of 6.8% was used to value the accrued liabilities, derived as explained above, but based on market
conditions at 31st December 2002. This resulted in an accounting surplus of assets over the accrued liabilities and pension prepayments of £544m or
6%, allowing for expected future salary increases. Spreading the accounting surplus using the straight-line method over the future remaining service
lives of the active members would be sufficient to produce a variation from regular cost of £90m including interest.
Total pension costs of the Group are summarised as follows:
2003 2002 2001
£m £m £m
The UK Retirement Fund 131 (69) (69)
Other UK pension schemes 17 20 24
Overseas pension schemes 32 22 28
180 (27) (17)
The increase in the pension cost is primarily due to a decrease in the accounting surplus which has resulted in a corresponding decrease in the
variation from regular cost. The Bank also operates a defined benefit scheme for overseas employees of the Bank similar in design to the 1964
Pension Scheme, the Barclays Bank (1951) Pension Fund, which had a formal valuation as at 30th September 2002 and an interim valuation as at
30th September 2003. The pension charge has been assessed using consistent assumptions to those used for the 1964 Pension Scheme and a credit
of £3m (2002: £3m, 2001: £3m) is included in Other UK pension schemes.
A net prepayment of £637m was reflected in the balance sheet (2002: £137m), which results from the difference between the amounts recognised as
costs in the profit and loss account and the amounts funded.
Note 60 contains the disclosures required by FRS 17, Note 61 provides additional disclosures required by US Statement of Financial Accounting
Standards (SFAS) No. 132 (revised).
Post-retirement benefits
Some 11,000 UK and US pensioners are provided with private health care on similar terms to current employees. In addition, 5,000 members of staff
and a further 1,000 Barclays Bank PLC pensioners who have retired since 30th June 1999 and have satisfied the qualification criteria may also become
eligible for this benefit, which is being progressively withdrawn for these pensioners over the period to 30th June 2008.
Other staff costs
Other staff costs comprise medical health care costs, social welfare taxes, staff transfer costs, redundancy payments and other sundry employee costs.
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