Barclays 2005 Annual Report Download - page 194

Notes to the accounts
For the year ended 31st December 2005
38 Retirement benefit obligations
Pension schemes
The UK Retirement Fund (UKRF), which is the main scheme of the Group comprises five sections.
The 1964 Pension Scheme
Most employees recruited before July 1997 are members of this non-contributory defined benefit scheme. Pensions are calculated by reference to
service and pensionable salary and are normally subject to a deduction from State pension age.
The Retirement Investment Scheme (RIS)
A defined contribution plan for most joiners between July 1997 and 1st October 2003. Between 5.5% and 13.5% of pensionable pay is credited to
members’ retirement accounts in addition to contributions paid by the members themselves; precise amounts are dependent upon each member’s
age and contribution decision. This was closed to new entrants on 1st October 2003 and the large majority of existing members of the RIS transferred
to afterwork in respect of future benefit accrual with effect from 1st January 2004. There are now no longer any active members of the RIS.
The Pension Investment Plan (PIP)
A defined contribution plan created from 1st July 2001 to provide benefits for certain employees of Barclays Capital. 10% of pay is credited to
members’ retirement accounts.
afterwork
Combines a contributory cash balance element with a voluntary defined contribution element. New employees since 1st October 2003 are eligible
to join afterwork. In addition, the large majority of active members of the RIS (now closed) were transferred to afterwork in respect of future
benefit accrual after 1st January 2004.
Career Average Section (Career Average)
The Career Average Section was established in the UKRF with effect from 1st May 2004 following the transfer of the members from the Woolwich
Pension Fund. The Career Average Section is a non-contributory career average scheme and is open to new members who are employees of either
the Clacton or FirstPlus call centres.
In addition, the costs of ill-health retirements and death in service benefits are generally borne by the UKRF for each of the five sections.
In addition to the UKRF, there are other defined benefit and defined contribution schemes in the UK and overseas.
Acquisition of Absa
Employees are members of the Absa Group Pension Fund, which has a defined benefit and a defined contribution structure. The defined benefit
structure was closed to new entrants on 31st March 1997 with most members transferring to the defined contribution structure.
The IAS 19 pension surplus of the scheme as at 31st December 2005 was £90m. A net IAS 19 liability of £nil has been recognised on the balance
sheet (consisting of £335m defined benefit obligation and £335m fair value of plan assets). These balances are not recognised in the financial
statements of the Absa Group Limited in accordance with South African legislative requirements.
The following tables present an analysis of defined benefit obligation and fair value of plan assets for all the Group’s pension schemes and
post-retirement benefits (the latter are unfunded) and present the amounts recognised in the income statement including those related to
post-retirement healthcare.
2005 2004
Other post- Other post-
retirement retirement
Pensions benefits Total Pensions benefits Total
£m £m £m £m £m £m
Staff cost charge
Current service cost 348 22 370 330 20 350
Interest cost 853 4 857 772 6 778
Expected return on scheme assets (898) – (898) (834) – (834)
Recognised actuarial loss 4–4–33
Past service cost 13 1 14 1–1
Curtailment or settlements (49) – (49) (34) – (34)
Total included in staff costs 271 27 298 235 29 264
Staff costs are included in other operating expenses.
Barclays PLC
Annual Report 2005
192