Barclays 2007 Annual Report Download - page 208

30 Retirement benefit obligations
Pension schemes
The UK Retirement Fund (UKRF), which is the main scheme of the Group, amounting to 94% of all the Group’s schemes in terms of benefit obligations,
comprises ten 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. 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.
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
The Career Average Section was established in the UKRF with effect from 1st May 2004 following the transfer of members from the Woolwich Pension
Fund. The Career Average Section is a non-contributory career average scheme and was closed to new entrants on 1st December 2006.
1951 Fund Section, AP89 Section, BCPS Section, CCS Section and Mercantile Section
Five new sections were established in the UKRF with effect from 31st March 2007 following the merger of the UKRF with five smaller schemes sponsored
from within the Group. All five sections are closed to new members.
The 1951 Fund Section, AP89 Section and Mercantile Section provide final salary benefits calculated by reference to service and pensionable salary.
The BCPS and CCS Sections provide defined contribution benefits. The benefits built up in these sections in relation to service before 6th April 1997 are
subject to a defined benefit minimum.
In addition, the costs of ill-health retirements and death in service benefits are generally borne by the UKRF for each of the ten sections.
Governance
The assets of the UKRF are held separately from the assets of the Group and are administered by trustees.
Barclays Pension Fund Trustees Ltd (BPFTL) acts as corporate trustee for the UKRF. BPFTL is a private limited company, incorporated on 20th December
1990, and is a subsidiary of Barclays Bank PLC.
As the corporate trustee for the UKRF, BPFTL is the legal owner of the assets of the UKRF and BPFTL holds these assets in trust for the beneficiaries
of the scheme.
BPFTL comprises nine Directors, of which six are Employer Directors selected by the Bank and three are Employee Directors nominated by the Pension
Fund Advisory Committee (PFAC). Employee Directors are selected from those eligible active employees and pensioner members who apply to be
considered for the role.
Employee Director vacancies are advertised to all eligible active and pensioner members. This enables any eligible member with an interest in becoming
an Employee Director to express that interest and be considered for the role. The PFAC provides the mechanism through which Employee Directors are
selected. The PFAC will accept nominations from eligible members and select from amongst all properly nominated candidates.
There are also three Alternate Employer Directors and three Alternate Employee Directors. The selection process for these appointments are as detailed
above. The role of alternate directors is to provide cover for individual directors, should they not be available for meetings.
Currently, the Bank decides the funding rate after consulting with the trustees. Under the Pensions Act 2004, which has practical impact for the UKRF
for the triennial valuation currently in progress with an effective date of 30th September 2007, the Bank and the trustee must agree the funding rate
(including a recovery plan to fund any deficit against the scheme specific statutory funding objective).
In addition to the UKRF, there are other defined benefit and defined contribution schemes in the UK and overseas. The same approach to pensions
governance applies to the other schemes in the UK but different legislation covers schemes outside of the UK where in most cases the Bank has the
power to determine the funding rate.
Notes to the accounts
For the year ended 31st December 2007
206 Barclays PLC Annual Report 2007