The Merseyside Pension Fund administers, on the Authority's behalf, a Local Government Superannuation Scheme that provides for the cost of meeting the future pension liabilities of the Authority's workforce.
The Authority paid an employer's contribution of £1,244k to the Pension Fund, representing 14.7% of pensionable pay. These figures compare to £1,170k (13.7% of pensionable pay) paid in the previous year. The contribution rate is determined by the Fund's actuary based on triennial actuarial valuations, the next review being effective from 1 April 2011. Under Pension Fund regulations contribution rates are set to meet the overall liabilities of the Fund.
In addition the Authority is responsible for all pension payments relating to added years benefits it has awarded, together with the related increases. In 2008/09 these amounted to £18k representing 0.22% of pensionable pay compared to £29k (0.36% of pensionable pay) in 2007/08.
(i) Participation in pension schemes
As part of the terms and conditions of employment of its officers and other employees, the Authority offers retirement benefits. Although these benefits will not actually be payable until employees retire, the Authority has a commitment to make the payments that needs to be disclosed at the time that employees earn their future entitlement.
The Authority participates in the following scheme:-
The Local Government Pension Scheme for civilian employees, administered locally by the Merseyside Pension Fund – this is a funded defined benefit final salary scheme, meaning that the Authority and employees pay contributions into a fund, calculated at a level intended to balance the pensions liabilities with investment assets.
Merseyside Integrated Transport Authority
Notes To The Financial Statements (Cont'd)
(ii) Change of accounting policy
Under the 2008 SORP the Authority has adopted the amendment to FRS7, Retirement benefits. As a result, quoted securities held as assets in the defined benefit pension scheme are now valued at bid price rather than mid-market value. The effect of this change is that the value of scheme assets at 31 March 2008 has been restated from £49.0m to £49.6m, an increase of £0.6m, resulting in a decrease of the pension deficit of £0.6m. Current and prior year surplus have been unaffected by this change.
(iii) Transactions relating to retirement benefits The cost of retirement benefits in the Net Cost of Services are recognised when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge made against the levy is based on the cash payable in the year, so the real cost of retirement benefits is reversed out in the Statement of Movement in the General Fund Balance. The following transactions have been made in the Income and Expenditure Account and Statement of Movement in the General Fund Balance during the year:-
(a) Income and Expenditure Account
Reversal of net charges made for retirement benefits in accordance with FRS17
Actual amount charged against the General Fund Balance for pensions in the year:
In addition to the recognised gains and losses in the Income and Expenditure Account, actuarial gains and (losses) of £1,102k (Group (£1,913k)) were included in the Statement of Total Recognised Gains and Losses ((£7,305k) and (£23,554k) for 2007/08 for MITA and the Group respectively).