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National Grid Electricity Transmission plc Annual Report and Accounts 2006/07
14. Net post-retirement liability
31 March
31 March
2007
2006
£m £m
Net assets as previously reported 157 (117)
Adoption of FRS17 amendment (3) (2)
Net assets as restated 154 (119)
The disclosures required by the Amendments to FRS 17 are set out below, which have been prepared by updating the results of the
valuation by qualified independent actuaries, detailed in note 8 to the consolidated financial statements on page 49, using the
projected unit method of valuation on the basis of the following assumptions:
2007
2006
Rate of increase in salaries *
4.2%
3.9%
Rate of increase in pensions in payment
3.3%
3.0%
Discount rate
5.4%
4.9%
Rate of increase in RPI
3.2%
2.9%
* A promotional age salary scale has been used where appropriate.
The mortality assumptions are based on the the assumptions underlying the Company's 2004 valuation which were based on actual
mortality experience of members within the scheme (covering the period from 2001 to 2004) and included an allowance for future
mortality improvements. In anticipation of further improvements since the previous valuation in both the base mortality tables and
expected future mortality, we have included an explicit loading of 7% to both the scheme liabilities and the future service cost.
The assumptions are that a normal health retiree currently aged 65 (reaching age 65 in 20 years time) will live on average for a
further 20.6 years (21.6 years) if they are male and for a further 24.1 years (25.3 years) if they are female.
- 82 -
Substantially all the Company's employees are members of the Electricity Supply Pension Scheme. See note 8 to the
consolidated financial statements on page 48.
Amendment to FRS 17 'Retirement Benefits'
The Company has voluntarily adopted early the requirements of the amendment to FRS 17 'Retirement Benefits', issued by the
ASB in December 2006, for the year ended 31 March 2007. As required by the amendment, the fair value of quoted securities
included in plan assets at 31 March 2007 has been taken as the current bid price (rather than mid-market value) and
comparative figures for 2006 have been restated accordingly. The adoption of the amendment to FRS17 had the following
impact on the net assets of the company: