Barclays 2013 Annual Report Download - page 356

Note 37: Pensions and post retirement benefits continued
The UKRF’s post-retirement mortality assumptions are based on a best estimate assumption derived from an analysis in 2011 of Barclays own
post-retirement mortality experience which was carried out at the time of the latest completed triennial funding valuation, and taking account of
the recent evidence from published mortality surveys. An allowance has been made for future mortality improvements based on the 2010 core
projection model published by the Continuous Mortality Investigation Bureau subject to a long term trend of 1% pa on future improvements. The
table below shows how the assumed life expectancy at 60, for members of the UKRF, has varied over the last three years:
Assumed life expectancy
2013 2012 2011
Life expectancy at 60 for current pensioners (years)
– Males 27.9 27.8 27.7
– Females 29.0 28.9 28.8
Life expectancy at 60 for future pensioners currently aged 40 (years)
– Males 29.3 29.2 29.1
– Females 30.6 30.5 30.4
Sensitivity analysis on actuarial assumptions
The sensitivity analysis has been calculated by valuing the UKRF liabilities using the amended assumptions shown in the table below and keeping
the remaining assumptions the same as disclosed in the UKRF assumptions table above, except in the case of the inflation sensitivity where other
assumptions that depend on assumed inflation have also been amended correspondingly. The difference between the recalculated liability figure
and that stated in the balance sheet reconciliation table above is the figure shown.
Change in key assumptions
Impact on UKRF defined
benefit obligation
(Decrease)/
increase
%
(Decrease)/
increase
£bn
0.5% increase in discount rate ( 9.2) ( 2.3)
0.5% increase in assumed price inflation 7.8 2.0
1 year increase to life expectancy at 60 3.0 0.8
The weighted average duration of the benefit payments reflected in the defined benefit obligation for the UKRF is 20 years.
Assets
A long term investment strategy has been set for the UKRF, with its asset allocation comprising 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 investment strategy ensures, amongst other aims, that investments are adequately diversified. Asset
managers are permitted some flexibility to vary the asset allocation from the long term investment 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.
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354 Barclays PLC Annual Report 2013
Notes to the financial statements
For the year ended 31 December 2013 continued