RBS 2011 Annual Report Download - page 338

336 RBS Group 2011
4 Pensions continued
The pension charge/(credit) to the income statement comprises:
2011
£m
2010
£m
2009
£m
Continuing operations 349 441 (1,510)
Discontinued operations —21 21
349 462 (1,489)
Curtailment gains of £78 million were recognised in 2010 arising from
changes to pension benefits in a subsidiary’s scheme.
Following the legal separation of ABN AMRO Bank N.V. on 1 April 2010,
ABN AMRO’s principal pension scheme in the Netherlands was
transferred to the State of the Netherlands. At 31 December 2009, this
scheme had fair value of plan assets of £8,118 million and present value
of defined benefit obligations of £8,298 million. The principal actuarial
assumptions at 31 December 2009 were: discount rate 5.25%; expected
return on plan assets (weighted average) 5.25%; rate of increase in
salaries 2.5%; rate of increase in pensions in payment 2.0%; and inflation
assumption 2.0%.
The Group and the Trustees of the Main scheme agreed the funding
valuation as at 31 March 2010 during the year. It showed that the value of
liabilities exceed the value of assets by £3.5 billion as at 31 March 2010,
aratio of assets to liabilities of 84%. In order to eliminate this deficit, the
Group will pay additional contributions each year over the period 2011 to
2018. These contributions started at £375 million per annum in 2011,
increasing to £400 million per annum in 2013 and from 2016 onwards will
be further increased in line with price inflation. These contributions are in
addition to the regular annual contributions of around £300 million for
future accrual benefits.
The Group expects to contribute a total of £843 million to its defined
benefit pension schemes in 2012. Of the net liabilities of schemes in
deficit, £163 million (2010 - £161 million; 2009 - £198 million) relates to
unfunded schemes.
Cumulative net actuarial losses of £4,805 million (2010 - £4,224 million;
2009 - £4,382 million) have been recognised in the statement of
comprehensive income, of which £3,589 million losses (2010 - £3,252
million losses; 2009 - £3,296 million gains) relate to the Main scheme.
Main scheme All schemes
History of defined benefit schemes 2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
Fair value of plan assets 21,111 19,110 16,603 14,804 18,575 25,086 22,816 27,925 25,756 27,662
Present value of defined benefit
obligations 22,955
21,092 18,675 15,594 18,099 27,137 24,999 30,830 27,752 27,547
Net deficit/(surplus) 1,844 1,982 2,072 790 (476) 2,051 2,183 2,905 1,996 (115)
Experience (losses)/gains on plan
liabilities (208) (858) 135 (55) (256) (200) (882) 328 (65) (210)
Experience gains/(losses) on plan
assets 759 1,718 993 (4,784) 163 636 1,797 1,344 (6,051) 19
Actual return/(loss) on pension
schemes assets 2,017 2,832 2,022 (3,513) 1,345 2,124 3,225 2,897 (4,186) 1,413
Actual return/(loss) on pension
schemes assets - % 10.6% 17.2% 13.8% (19.0%) 7.8% 9.3% 15.6% 11.4% (14.5%) 6.9%
Notes on the consolidated accounts continued