Barclays 2010 Annual Report Download - page 233

28 Retirement benefit obligations continued
Mortality assumptions
The UKRF’s post-retirement mortality assumptions were based on the standard 2000 series tables published by the Institute and Faculty of Actuaries
as they are considered to be most relevant. These tables were adjusted in line with the UKRF’s actual experience and an allowance has been made for
future mortality improvements based on the medium cohort projections published by the Continuous Mortality Investigation Bureau subject to a floor
of % pa on future improvements. On this basis the post-retirement mortality assumptions for the UKRF are as follows:
2010 2009 2008 2007 2006
Longevity at 60 for current pensioners (years)
– Males 27.6 27.527.4 26.7 25.8
– Females 28.7 28.7 28.5 27.9 29.5
Longevity at 60 for future pensioners currently aged 40 (years)
– Males 29.7 29.6 29.5 28.0 27.1
– Females 30.7 30.6 30.5 29.1 30.7
Sensitivity analysis on principal assumptions
UKRF sensitivity Impact on UKRF
benefit obligation
(Decrease)/
Increase
%
(Decrease)/
Increase
£bn
0.5% increase in:
– Discount rate (9.4) (1.9)
– Rate of inflation 8.4 1.7
1 year increase to longevity at 60 2.5 0.5
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 Trustee 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.
Barclays PLC Annual Report 2010 www.barclays.com/annualreport10 231
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