Barclays 2015 Annual Report Download - page 327

home.barclays/annualreport Barclays PLC Annual Report 2015 I 325
35 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 2014 of Barclays’ own
post-retirement mortality experience, and taking account of the recent evidence from published mortality surveys. An allowance has been made for
future mortality improvements based on the 2013 core projection model published by the Continuous Mortality Investigation Bureau subject to a
long-term trend of 1.25% p.a. in future improvements. The table below shows how the assumed life expectancy at 60, for members of the UKRF, has
varied over the past three years:
Assumed life expectancy
2015
£m
2014
£m
2013
£m
Life expectancy at 60 for current pensioners (years)
– Males 28.4 28.3 27.9
– Females 30.0 29.9 29.0
Life expectancy at 60 for future pensioners currently aged 40 (years)
– Males 30.2 30.1 29.3
– Females 32.0 31.9 30.6
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 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. The selection of these movements to illustrate the sensitivity of the defined benefit
obligation to key assumptions should not be interpreted as Barclays expressing any specific view of the probability of such movements happening.
Change in key assumptions
2015 2014
Impact on UKRF defined
benefit obligation
Impact on UKRF defined
benefit obligation
(Decrease)/
Increase
%
(Decrease)/
Increase
£bn
(Decrease)/
Increase
%
(Decrease)/
Increase
£bn
0.5% increase in discount rate (8.2) (2.1) (9.0) (2.5)
0.5% increase in assumed price inflation 5.4 1.4 7.3 2.0
One year increase to life expectancy at 60 3.5 0.9 3.5 1.0
The weighted average duration of the benefit payments reflected in the defined benefit obligation for the UKRF is 18 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, among 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 assets held by the scheme, with any derivative holdings reflected on a fair value basis.
The value of the assets of the schemes and their percentage in relation to total scheme assets were as follows:
Analysis of scheme assets
Total Of which relates to UKRF
Value
£m
% of total
fair value of
scheme
assets
%
Value
£m
% of total
fair value of
scheme
assets
%
As at 31 December 2015
Equities – quoted 7,764 27.0 6,947 25.9
Equities – non quoted 1,757 6.1 1,750 6.5
Bonds – fixed governmenta1,105 3.8 577 2.2
Bonds – index-linked governmenta9,677 33.7 9,670 36.0
Bonds – corporate and othera5,856 20.4 5,680 21.2
Property – commercialb1,602 5.6 1,581 5.9
Derivativesb183 0.6 183 0.7
Cash 67 0.2 47 0.2
Otherb741 2.6 394 1.4
Fair value of scheme assets 28,752 100.0 26,829 100.0
Notes
a Assets held are predominantly quoted.
b Assets held are predominantly non-quoted.
The Strategic Report Governance Risk review Financial review Financial statements Shareholder information