Archived decisions
7f |
Basis for estimating assets and liabilities |
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Liabilities have been assessed on an actuarial basis using the projected |
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unit method. This estimates the pensions that will be payable in future |
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years, based on assumptions about mortality rates, salary levels etc. |
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The main assumptions are as follows: |
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2006/07 |
2007/08 |
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% per year |
% per year |
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Rate of discount for scheme liabilities |
5.3 |
6.8 |
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Rate of increase in salaries |
4.7 |
5.2 |
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Rate of increase in pensions in payment |
3.2 |
3.7 |
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Rate of increase in deferred pensions |
3.2 |
3.7 |
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Proportion of employees opting to take |
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a commuted lump sum: |
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for pre 2008 service |
50.0 |
25 |
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for post 2008 service |
50.0 |
75 |
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Rate of inflation |
3.2 |
3.7 |
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Rate of return on equities (shares) |
7.7 |
7.6 |
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Rate of return on Government bonds |
4.7 |
4.6 |
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Rate of return on property |
6.7 |
6.6 |
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Rate of return on other assets |
5.6 |
6 |
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Average long term expected rate of return |
6.9 |
6.7 |
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Assets are valued at fair value, mainly market value for investments, |
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and consist of the following categories, by proportion: |
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31 March |
31 March |
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2007 |
2008 |
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% |
% |
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Equities |
67.2 |
61.9 |
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Government Bonds |
20.7 |
26.6 |
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Property |
4.5 |
5.8 |
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Corporate bonds |
2.7 |
0 |
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Other assets |
4.9 |
5.7 |
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100.0 |
100.0 |
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48 |
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