112 LV= Annual Report 2012
Notes to the financial statements continued
31 December 2012
39. Pension benefit asset/(obligation) (continued)
ii) LV Scheme (continued)
2012 2011
c) Amounts recognised in the Statement of Comprehensive Income £m £m
Current service cost 22.0 19.1
Interest cost 44.4 46.2
Expected return on assets (42.9) (47.9)
Curtailment gain (13.0) -
Past service cost 0.1 0.5
Amount charged to income 10.6 17.9
Actuarial net loss/(gain) 138.0 (66.5)
Total amount charged/(credited) to comprehensive income 148.6 (48.6)
The actual return on plan assets was £9.2m (2011: £178.8m).
d) Principal assumptions used 2012 2011
Discount rate 4.1% 4.7%
Rate of salary increase 3.0% 3.65%
Expected return on plan assets n/a 4.1%
RPI Inflation 3.0% 2.9%
CPI Inflation 2.0% 2.0%
Pension increases for in-payment benefits
- RPI price inflation capped at 5% pa, floor of 3% pa 3.5% 3.5%
- RPI price inflation capped at 5% pa 3.0% 2.9%
- RPI price inflation capped at 2.5% pa 2.2% 2.1%
- CPI price inflation capped at 3.0% pa 1.9% 1.9%
Pension increases for deferred benefits
- pre 6 April 2009 accrual 2.0% 2.0%
- post 6 April 2009 accrual 2.0% 2.0%
Scheme member valuation date 31 March 2012 31 March 2009
Mortality for members is assumed to follow the tables below as at 31 December 2012
Pre-retirement mortality: Deferred pensioners
- Males 1NMA x 0.95 table 1NMA x 0.95 table
- Females 1NFA x 0.98 table 1NFA x 0.98 table
Post-retirement mortality: Non-pensioners
- Males LV specific tables from Club Vita 1NMA x 0.95 table
- Females (former employees) LV specific tables from Club Vita 1NFA x 0.98 table
- Females (dependants) LV specific tables from Club Vita 1NFA x 1.12 table
Post-retirement mortality: current pensioners and dependants
- Males LV specific tables from Club Vita 1NMA x 0.85 table
- Females (former employees) LV specific tables from Club Vita 1NFA x 0.88 table
- Females (dependants) LV specific tables from Club Vita 1 NFA x 1.02 table
In all cases as at 31 December 2012 CMI Core 2011 projections with a long term trend of 1.25% have been applied (31 December
2011 medium cohort improvements have been applied from 2002 onwards and from 2009 a minimum annual rate of improvement of
1.25%pa has been applied).