Our Accounts 111
Notes to the financial statements continued
31 December 2012
39. Pension benefit asset/(obligation) (continued)
ii) LV Scheme
a) Information about the scheme
The Society is responsible for the LV= Employee Pension Scheme (LV Scheme), a defined benefit pension scheme. The scheme closed
to new entrants on 31 December 2009 and on 1 November 2012 it was announced that the scheme would close to future accrual for
existing members from July 2013. Accordingly allowance has been made for the closure to future accrual within the 31 December 2012
figures with a curtailment gain being recognised as a remeasurement event at the year end reporting date.
On 6 December 2012 the Trustees of the LV Scheme entered into a Longevity Swap to mitigate the future mortality risk. Further details
on this are included within the Business Review section.
From 1 January 2011 the rate of increase in deferred pensions changed from being related to RPI to CPI. The impact of this was a
reduction in the calculation of the liabilities.
b) Net Statement of Financial Position
2012 2011
£m £m
Present value of defined benefit obligation (1,059.0) (942.0)
Fair value of plan assets 1,051.3 1,050.1
Pension benefit (obligation)/asset at the end of the year (7.7) 108.1
2012 2011
The movement in the defined benefit obligation over the year is as follows: £m £m
Beginning of year 942.0 854.4
Current service cost 22.0 19.1
Interest cost 44.4 46.2
Gain on curtailment (13.0) -
Statements and Reviews
Actuarial losses 104.3 64.4
Benefits paid (37.1) (39.2)
Past service cost 0.1 0.5
Administrative expenses paid (3.7) (3.4)
End of year 1,059.0 942.0
2012 2011
The movement in the fair value of plan assets over the year is as follows: £m £m
Beginning of year 1,050.1 870.3
Expected return on plan assets 42.9 47.9
Our Businesses
Actuarial (losses)/gains (33.7) 130.9
Employer contributions 32.8 43.6
Benefits paid (37.1) (39.2)
Administrative expenses paid (3.7) (3.4)
End of year 1,051.3 1,050.1 Risk Management
Corporate Governance
Our Accounts