Barclays 2009 Annual Report Download - page 242

240 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Notes to the accounts
For the year ended 31st December 2009
continued
30 Retirement benefit obligations continued
Post-retirement health care
A one percentage point change in assumed health care trend rates, assuming all other assumptions remain constant would have the following effects
for 2009:
1% increase 1% decrease
£m £m
Effect on total of service and interest cost components 1 (1)
Effect on post-retirement benefit obligation 13 (11)
Assets
A long-term strategy has been set for the asset allocation of the UKRF which comprises a mixture of equities, bonds, property and other appropriate assets.
This recognises that different asset classes are likely to produce different long-term returns and some asset classes may be more volatile than others.
The long-term strategy ensures that investments are adequately diversified. Asset managers are permitted some flexibility to vary the asset allocation from
the long-term strategy within control ranges agreed with the Trustees from time to time.
The UKRF also employs derivative instruments, where appropriate, to achieve a desired exposure or return, or to match assets more closely to liabilities. The
value of assets shown reflects the actual physical assets held by the scheme, with any derivative holdings reflected on a mark to market basis. The expected
return on asset assumptions overall have been based on the portfolio of assets created after allowing for the net impact of the derivatives on the risk and
return profile of the holdings.
During the second half of 2009, an investment de-risking programme was agreed for the UKRF between the Bank and the Trustee in order to achieve a
better matching between assets and liabilities and to reduce the investment risk profile of the plan. This involved a partial sale of physical equities and
purchase of index-linked gilts.
The value of the assets of the schemes, their percentage in relation to total scheme assets, and their expected rate of return at 31st December 2009 and
31st December 2008 were as follows:
UK schemes Overseas schemes Total
% of Expected % of Expected % of Expected
total fair rate total fair rate total fair rate
value of of value of of value of of
Value scheme return Value scheme return Value scheme return
£m assets % £m assets % £m assets %
2009
Equities 4,236 27 8.6 400 39 7.8 4,636 28 8.5
Bonds 8,787 56 4.9 387 38 6.0 9,174 55 4.9
Property 1,186 8 7.0 20 2 12.6 1,206 7 7.1
Derivatives (37) – – – – – (37) – –
Cash 1,157 7 0.5 139 14 3.2 1,296 8 0.8
Other 346 2 5.0 79 7 8.1 425 2 5.6
Fair value of plan assetsa15,675 100 6.7 1,025 100 6.6 16,700 100 6.7
2008
Equities 5,813 43 8.5 217 23 9.3 6,030 42 8.5
Bonds 6,360 47 5.3 166 17 6.2 6,526 45 5.3
Property 1,214 9 7.2 16 2 13.4 1,230 8 7.3
Derivatives (420) (3) – – – – (420) (3) –
Cash (131) (1) 2.0 415 43 7.6 284 2 3.9
Other 701 5 7.4 145 15 6.4 846 6 7.2
Fair value of plan assetsa13,537 100 6.8 959 100 8.0 14,496 100 6.9
Note
aExcludes £890m (2008: £675m) representing the money purchase assets of the UKRF.