Ryanair 2005 Annual Report Download - page 64

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26 PENSIONS
The company operates defined benefit and defined contribution pension schemes.
The group has continued to account for pensions in accordance with the accounting standard SSAP 24 “Accounting for Pension Costs”
and the disclosures given in (a) below are those required by that standard. A new accounting standard on pensions (Financial
Reporting Standard No.17 “Retirement Benefits” (“FRS 17”) was issued in November 2000. In July 2002, the Accounting Standards
Board deferred the requirement for the full adoption of FRS 17 until the International Accounting Standards Board has reconsidered
its international standard, IAS 19 “Employee Benefits”. FRS 17 has, accordingly not been adopted in the profit and loss account or
the balance sheet, however the phased disclosures required by FRS 17 have been outlined at (b) below.
(a) SSAP 24 disclosures.
Pensions for certain employees are funded through defined benefit pension schemes, the assets of which are vested in independent
trusts for the benefit of the employees and their dependants. The contributions are based on the advice of an independent
professionally qualified actuary, obtained at three yearly intervals. The latest actuarial valuation of the scheme was at December
31, 2003 and used the projected unit method. The principal actuarial assumptions used were as follows:
THE PRINCIPAL ACTUARIAL ASSUMPTIONS USED WERE AS FOLLOWS:
Rate of long term investment returns will exceed rates of pensionable pay increases by 3.0%
Rate of long term investment will exceed the rate of post retirement pension increases by 6.5%
The actuarial report showed that at the valuation date the market value of the scheme’s assets was 11.5m, which was sufficient to
cover more than 100% of the accrued liabilities, based on current earnings and 78% of the accrued liabilities allowing for expected
future increases in earnings. The actuarial report recommends payment of contributions at 11.5% of staff and 17.8% of pilots’
pensionable salaries respectively, which is an increase from previous contribution rates, intended to make good the shortfall on
accrued liabilities, allowing for expected future increases in earnings.
The total pension charge for the group for the year to March 31, 2005 was 2,744,707 of which 1,299,654 relates to defined benefit
pension schemes. While the actuarial report is not available for public inspection, the results are advised to the members of the
scheme.
(b) FRS 17 disclosures
The valuation of Ryanair’s defined benefit scheme used for the purposes of the FRS 17 disclosures has been based on the most recent
triennial actuarial valuation of the scheme identified above and updated to March 31, 2005 by an independent qualified actuary. The
assets and liabilities of the Company’s UK defined benefit pension plan are included in the disclosures for the first time in the current
year.
2005 2004 2003
The financial assumptions used for the Ryanair defined benefit schemes are: % %%
Rate of general increase in salaries 3.65 3.50 3.50
Discount rate 4.67 5.00 5.25
Rate of price inflation 2.15 2.00 2.50
(Continued)
Notes
54
ANNUAL REPORT & FINANCIAL STATEMENTS 2005