RBS 2013 Annual Report Download - page 359
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Business review Risk and balance sheet management
357
Risk is also mitigated in other ways. In October 2006, the main scheme
was closed to new employees. In November 2009, the Group confirmed
that it was making changes to the main scheme and a number of other
defined benefit schemes including the introduction of a limit of 2% per
annum (or the annual change in the Consumer Price Index, if lower) to
the amount of any salary increase that will count for pensionable
purposes.
In October 2012, the Group confirmed that it was offering employees the
choice between an increase to the charge made through its flexible
benefits programme for membership of the main scheme by 5% of
salaries or an increase in their Normal Pension Age from 60 to 65 in
respect of service from October 2012 with no additional charge.
The table below shows the sensitivity of the Main scheme’s assets and
liabilities (measured according to IAS 19 ‘Employee Benefits’) to changes
in interest rates and equity values at the year end, taking account of the
current asset allocation and hedging arrangements.
Change Change Increase in ne
t
in value in value o
f
pension
of assets liabilities obligations
£m £m £m
A
t 31 December 2013
Fall in nominal swap yields of 0.25% at all durations with no change in credit spreads or real swap yields 217 333 (116)
Fall in real swap yields of 0.25% at all durations with no change in credit spreads or nominal swap yields 595 895 (300)
Fall in credit spreads of 0.25% at all durations with no change in nominal or real swap yields 60 1,245 (1,185)
Fall in equity values of 10% (894) — (894)
A
t 31 December 2012
Fall in nominal swap yields of 0.25% at all durations with no change in credit spreads or real swap yields 76 255 (179)
Fall in real swap yields of 0.25% at all durations with no change in credit spreads or nominal swap yields 578 995 (417)
Fall in credit spreads of 0.25% at all durations with no change in nominal or real swap yields 71 1,261 (1,190)
Fall in equity values of 10% (862) — (862)
A
t 31 December 2011
Fall in nominal swap yields of 0.25% at all durations with no change in credit spreads or real swap yields 106 200 (94)
Fall in real swap yields of 0.25% at all durations with no change in credit spreads or nominal swap yields 557 911 (354)
Fall in credit spreads of 0.25% at all durations with no change in nominal or real swap yields 104 1,118 (1,014)
Fall in equity values of 10% (935) — (935)
*unaudited