EC Meeting May 2018

General Federation of Trade Unions Notes to the Accounts for the year ended 31 December 2017

14 Pension commitments

The Federation is a member of the General Federation of Trade Unions Pension Scheme, a defined benefit scheme in the UK which covers various organisations on a combined basis. The Federation's share of the scheme equates to 64% (2016 - 64%) of net assets and future liabilities. A full actuarial valuation for statutory funding purposes was carried out by a qualified independent actuary as at 31 December 2015. An actuarial valuation report as at 31 December 2017 was carried out by a qualified actuary and the results of this valuation are reflected in the financial statements to 31 December 2017 as outlined below.

The major assumptions used by the actuary were:

2017

2016

Weighted average assumptions to determine defined benefit obligations

Discount rate

2.60% 4.10% 3.10% 2.30% 3.10% 2.30%

2.70% 4.20% 3.20% 2.40% 3.20% 2.40%

Salary increase rate

Pensions-in-payment increase rate (where linked to RPI)

Deferred pension increase rate

Price inflation rate (RPI) Price inflation rate (CPI)

Assumed life expectancy on retirement at age 65

Retiring today (member age 65)

22.6 24.7

22.5 24.6

Retiring in 20 years (member age 45 today)

2017

2016

£000s

£000s

Amounts recognised in the balance sheet were as follows:

7,965

8,068

Net defined benefit liability Defined benefit obligation Fair value of plan assets

(7,169)

(6,938)

796

1,130

2017

2016

£000s

£000s

Change in defined benefit obligation

8,068

7,087

Defined benefit obligation at end of prior year Cost arising from employee service in reporting period Interest expense Benefit payments from plan assets

22

33

213

272

(356)

(270)

6

6

Effect of experience adjustments Effect of changes in assumptions Participant contributions

12

1,399

-

(459)

7,965

8,068

2017

2016

£000s

£000s

Change in fair value of plan assets

6,938

5,867

Fair value of plan assets at end of prior year

184

225

Interest income

81

81

Employer contributions

6

6

Participant contributions Benefit payments from plan assets Return on plan assets

(356)

(270)

316

1,029 6,938

7,169

15