Rnib group annual report and financial statements 2012/13


Analysis of net assets between funds

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20. Analysis of net assets between funds

Group fund balances are represented by:


Unrestricted funds

£’000

Restricted

funds

£'000

Endowment funds

£’000

Total

funds 2013

£’000

Total funds 2012

£’000

Tangible fixed assets

63,413

16,000

-

79,413

79,545

Investments

18,462

14,002

5,393

37,857

34,387

Net current assets

8,768

1,133

-


9,901

11,645

Long-term liabilities

(21,000)

(205)

-

(21,205)

(22,357)

Defined Benefit Pension Scheme asset (liability)

4,395

(3,198)

-

1,197

(14,513)

Total net assets

74,038

27,732

5,393

107,163

88,707



Charity fund balances are represented by:


Unrestricted funds

£’000

Restricted

funds

£'000

Endowment funds

£’000

Total

funds 2013

£’000

Total funds 2012

£’000

Tangible fixed assets

63,413

-

-

63,413

64,369

Investments

18,467

5,434

5,392

29,293

26,811

Net current assets

8,763

556

-

9,319


9,561

Long-term liabilities

(21,000)

-

-

(21,000)

(22,000)

Defined Benefit Pension Scheme asset (liability)

4,395

-

-

4,395

(11,546)

Total net assets

74,038

5,990

5,392

85,420

67,195


21. Pension costs


The RNIB Group pension arrangements comprise those of RNIB and the associated charities, Action and CVV. A summary of the movement in pension assets and liabilities for the Group’s defined benefit pension funds is shown below:

a. a. Summary of scheme costs and balances


Amounts charged to SOFA

£'000

Actuarial losses
£'000

Defined Benefit Pension Scheme liability

£'000

RNIB Charity

4,284

15,303

4,395

Action schemes one and three

98

(264)

(2,200)

CVV

34

(104)

(998)

Total defined benefit schemes

4,416

14,935

1,197

RNIB

The RNIB Retirement Benefits Pension Scheme (RBPS) is partly defined benefit and partly defined contribution. Members joining before 1 April 2005 are wholly defined benefit, with those members joining after, having a hybrid of defined benefit and defined contribution. The assets of the Scheme are held in a separate fund, under control of its trustees, to which RNIB has no access. A salary sacrifice arrangement was introduced 1 July 2010 whereby the member’s salary is reduced by the amount of the member contribution and in return the employer makes an equivalent contribution to the Scheme.

An actuarial valuation was carried out at 31 March 2012 by the Scheme’s actuaries “Aon Hewitt”, using the projected unit method. The valuation disclosed that the market value of the Scheme’s assets (excluding Voluntary Contributions) at that date was £149million, and that there was a deficit (calculated as the excess of the market value of the Scheme’s assets to the value of its past service ongoing liabilities, with allowance for future pay increases) of £10.1million. Contributions by RNIB on the defined benefit element of the scheme increased to 12.9 per cent of pensionable salaries. In addition RNIB and Action share the administrative costs of the Scheme.
As a part of the recovery plan RNIB agreed to make additional contributions of £830,000 a year until 30 June 2018. The pension scheme Trustees have considered whether the measure used for inflation linked increases should be based on CPI rather than RPI. Given the scheme rules, it has been decided to continue to use RPI.
Following the merger with NLB, RNIB also offers the Pensions Trust’s Growth Plan. The Growth Plan is a multi employer pension plan under which contributions are invested in personal funds which have a capital guarantee and convert to a pension on retirement. No contributions are currently required into the Plan, but the Pensions Trust has advised that in the event of a withdrawal from the Plan, or in the event of the Pensions Trust being wound up, RNIB would have liability to pay a share of the accumulated deficit in the Plan, which is estimated at £937,815 based on the valuation of the Plan as at 31 December 2012. The next full actuarial valuation will be carried out during 2014.

RNIB also participates in the Teachers' Pension scheme, a defined benefit scheme for employees who were formerly employed by local education authorities. The Teachers' Pension Scheme is an unfunded scheme. Contributions on a “pay as you go” basis are credited to The Exchequer under arrangements governed by The Superannuation Act 1972.

Action

Action participates in five pension schemes and the assets of all the schemes are held separately from those of the Charity.


Scheme number one is the Action Defined Benefit Scheme which was offered through the Pensions Trust. The scheme has been closed to new members since 1 October 1997.
Scheme number two is the Action for Blind People money purchase scheme and is open to existing and new employees. It is currently substantially all invested in the Pensions Trust Growth Series 3 Scheme. Due to its capital guarantee, this scheme differs in some important respects from a standard Defined Contribution Scheme, and following legislation in 2011 is now classified legally as a Defined Benefit Scheme. Action is unable to identify, on a reasonable and consistent basis, its share of the underlying assets because the Pensions Trust does not provide such information as this is unavailable on a disaggregated basis. Accordingly due to the nature of the Scheme, Action has accounted for contributions as if the scheme were a Defined Contribution Scheme. Members contributions are not fixed, employees are able to make contributions up to 10 per cent of their salaries.
Scheme number three is a defined benefit scheme operated by Wiltshire County Council and related to staff transferred from Shelwork Industries on 1 April 2000. The Shelwork factory operation has ceased trading and therefore the majority of the members of the scheme are no longer employees of Action.

Scheme number four is the RNIB Retirement Benefits Pension Scheme of which Action became an Employer on 1 April 2009 pursuant to the Transfer of Undertakings Agreement whereby 118 scheme members transferred by TUPE to Action. With regard to Action it closed to new members with immediate effect from 1 April 2009. Under the Association Agreement with RNIB, the deficit on the scheme disclosed by the Triennial Actuarial Valuation at 31 March is the responsibility of RNIB. The FRS17 review of the whole scheme at 31 March 2013 produced a surplus of which £15,000 (2012: deficit £46,000) is attributable to Action. Action also participates in the Teachers' Pension Scheme, a defined benefit scheme for employees who were formerly employed by local education authorities. The Teachers' Pension Scheme is an unfunded scheme. Contributions on a “pay as you go” basis are credited to the Exchequer under arrangements governed by the Superannuation Act 1972.

CVV

CVV is a participant within the defined benefit scheme “Cardiff and Vale of Glamorgan Pension Fund” which is part of the Local Government Pension Scheme.


The following tables, and narrative, provide the detailed disclosures that relate to the RNIB Retirement Benefit Scheme. The column headed “Associated charities” refers to Action’s schemes one and three, together with that for CVV. Together these explain the Group’s pension costs.


b. b. Scheme assets and liabilities

Expected

asset

return

% p.a.

RNIB

£'000

Expected

asset

return

% p.a.

Associated charities
£'000

Total

£'000

2013
















Scheme assets at fair value















Equities


7.20

92,818

5.70-7.80

9,543

102,361

Corporate and Other Bonds

3.80

16,253

2.90-3.90

3,490

19,743

Fixed Interest Gilts

-

-

2.80

80

80

Index-linked Gilts

2.55

42,312







42,312

Property (including unit trusts)

6.50

11,813


3.90-7.30

996

12,809

Cash and Other (including net current assets)

2.70

2,025

0.50-7.80

154

2,179

Total market value of Scheme assets

5.57

165,221

5.14-6.95

14,263

179,484

Present value of Scheme liabilities




(160,826)




(17,461)

(178,287)

Net Pension Scheme asset (liability)




4,395


(3,198)


1,197



b. b. Scheme assets and liabilities (continued)

Expected

asset

return

% p.a.

RNIB

£'000

Expected

asset

return

% p.a.

Associated charities
£'000

Total

£'000

2012
















Scheme assets at fair value
















Equities

7.10

71,908

6.20-8.10

8,478

80,386


Corporate and Other Bonds

4.10

14,686

3.10-4.20

3,299

17,985

Fixed Interest Gilts

3.10

-

3.10

71

71

Index-linked Gilts

2.85

47,758

-

-

47,758

Property (including unit trusts)

6.80

12,388

4.40-7.60

965

13,353

Cash and Other (including net current assets)

3.10

2,247

0.50-8.10

205


2,452

Total market value of Scheme assets

5.36

148,987

5.50-7.21

13,018

162,005

Present value of Scheme liabilities




(160,533)




(15,985)

(176,518)

Net Pension Scheme liability




(11,546)




(2,967)

(14,513)

The assets of the RNIB Scheme are held with Legal and General plus BlackRock (for equities, bonds and properties), The defined benefit assets are invested according to the Statement of Investment Principles agreed by the Scheme Trustees. This sets a benchmark allocation of assets. The defined contribution assets are invested in line with member instructions. RNIB employs a building block approach in determining the long-term rate of return on pension plan assets. Historical markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital market principles.



c. c. Analysis of charge to the SOFA

RNIB

£'000

Associated charities

£'000

Total

£'000

Year to 31 March 2013










Current service cost

4,051

171

4,222

Interest cost

7,623

756

8,379

Expected return on Scheme assets

(7,390)

(795)

(8,185)

Expense recognised in SOFA

4,284

132


4,416

Year to 31 March 2012










Current service cost

3,559

231

3,790

Interest cost

7,467

825

8,292

Expected return on Scheme assets

(8,329)

(890)

(9,219)

Expense (income) recognised in SOFA

2,697

166

2,863

The above service cost excludes any RNIB contributions paid to the defined contributions section of the Scheme.

The Charity contributed to the Scheme at the rate of 12 per cent of pensionable salaries. These rates include the cost of death in service insurance cover. During the year the Charity contributed £4,922,000 (2012: £4,888,000) to the Scheme, and in the next year the Charity expects to contribute £4,870,000. In addition RNIB and Action share the administrative costs of the Scheme. In 2010, as a part of the recovery plan it was agreed that RNIB would make additional annual contributions of £1million over 17 years, and these contributions are included in the amounts that the Charity contributed to the Scheme, referred to above. From 1 April 2013 these additional contributions will reduce to £830,000 per year until 30 June 2018. Employer contributions will increase from 12 per cent to 12.9 per cent on the defined benefit element of the scheme. From 1 July 2010 under the RNIB salary sacrifice arrangement employer contributions and service cost include the member salary sacrifice contributions while member contributions are shown as £nil. RNIB also makes contributions to a number of other pension schemes including the Teachers' Pension Scheme. The Teachers' Pension Scheme is a defined benefit scheme for employees who were formerly employed by local education authorities. The Teachers' Pension Scheme is an unfunded scheme.

Contributions on a “pay-as-you-go” basis are credited to the Exchequer under arrangements governed by the Superannuation Act 1972. RNIB made contributions to the Teachers’ Pension Scheme for 27 employees (2012: 30) totalling £123,000 (2012: £134,000). In addition Action made contributions for two employees totalling £13,000 (2012: three employees totalling £16,000) to the Teacher’s Pension Scheme.


d. d. Analysis of actuarial gains and losses

RNIB

£'000

Associated charities

£'000

Total

£'000

Year to 31 March 2013










Experience gains (losses) on scheme assets

8,110

(756)

8,866

Experience gains (losses) on scheme liabilities

1,990

(65)

1,925

Gains (losses) on scheme liabilities arising out of changes to the actuarial assumptions used


5,203

(1,059)

4,144

Total actuarial gain (loss)

15,303

(368)

14,935

Year to 31 March 2012










Experience gains (losses) on scheme assets

3,405

(402)

3,003

Experience gains on scheme liabilities

654

348

1,002

Losses on scheme liabilities arising out of changes to the actuarial assumptions used

(19,519)

(761)

(20,280)

Total actuarial gain


(15,460)

(815)

(16,275)

In accordance with the requirements of FRS17 the full actuarial valuation at 31 March 2009 was updated by Aon Hewitt at 31 March 2013. The principal assumptions they used for this purpose are summarised in the following table.




e. e. Actuarial assumptions

2013

RNIB

%

2012

RNIB

%

2013

Associated charities

%

2012

Associated charities

%

Discount rate

4.50

4.75

4.30-4.50

4.70-4.80

Inflation assumption (RPI)

3.35

3.35

3.30-3.60


3.10-3.50

Inflation assumption (CPI)

-

-

2.40-2.80

2.20-2.80

Rate of increase in salaries

3.35

3.85

4.30-5.10

4.50-4.80

Rate of increase in pensions payments













Pre 1 July 2010 - 5% p.a. cap

3.05

3.20







Post 30 June 2010 - 3% p.a. cap

2.25

2.50

2.40-2.80

2.20-2.50


Rate of increase in deferred pensions













Pre 1 July 2010 - 5% p.a. cap

3.35

3.35







Post 30 June 2010 - 3% p.a. cap

3.00

3.00

2.70-3.30

2.50-3.10

Expected rate of return on scheme assets

5.57

5.36

5.50-6.90

5.50-7.20

For the RNIB scheme the mortality assumptions are based on standard mortality tables which allow for future mortality improvements. The assumptions are that a member currently aged 60 will live on average for a further 27.5 years if they are male and for a further 29.6 years if they are female. For a member who retires in 2033 at age 60 the assumptions are that they will live on average for a further 28.5 years after retirement if they are male and for a further 31.4 years after retirement if they are female, as last year. For schemes offered by the Associated Charities, for current Pensioners, their life expectancy beyond the pensionable age of 65 ranges between 21.3 to 23.9 years if they are male, and 23.6 to 26.7 years if they are female. For future Pensioners their life expectancy beyond the pensionable age of 65 ranges between 23.3 to 25.6 years if they are male and 25.5 to 28.7 years if they are female.




f. f. Changes to the present value of the defined benefit obligation

RNIB

£'000

Associated charities

£'000

Total

£'000

As at 1 April 2011

134,869

15,194

150,063

Current service cost

3,559

231

3,790

Interest cost

7,467

825

8,292

Contributions by scheme participants

194

35

229

Actuarial gain on scheme liabilities

18,865

413


19,278

Net benefits paid out

(4,421)

(713)

(5,134)

As at 31 March 2012

160,533

15,985

176,518

Current service cost

4,051

171

4,222

Interest cost

7,623

756

8,379

Contributions by scheme participants

161

29

190

Actuarial (loss) gain on scheme liabilities

(7,193)

1,124

(6,069)

Net benefits paid out


(4,349)

(604)

(4,953)

As at 31 March 2013

160,826

17,461

178,287



g. g. Changes to the fair value of scheme assets during the year

RNIB
£'000

Associated charities

£'000

Total
£'000

As at 1 April 2011

136,592

12,880

149,472

Expected return on scheme assets

8,329

890

9,219

Contributions by the employer

4,888

(402)


3,003

Contributions by scheme participants

194

328

5,216

Actuarial gain on scheme assets

3,405

35

229

Net benefits paid out

(4,421)

(713)

(5,134)

As at 31 March 2012

148,987

13,018

162,005

Expected return on scheme assets

7,390

795

8,185

Contributions by the employer

4,922

269

5,191


Contributions by scheme participants

161

29

190

Actuarial gain on scheme assets

8,110

756

8,866

Net benefits paid out

(4,349)

(604)

(4,953)

As at 31 March 2013

165,221

14,263

179,484

Actual return on scheme assets










2012

11,734

488

12,222

2013

15,500

1,551


17,051



h. h. Historical scheme information

2013

£'000

2012

£'000

2011

£'000

2010

£'000

2009

£'000

RNIB
















Fair value of scheme assets

165,221

148,987

136,592

126,067

93,446

Defined benefit obligation

(160,826)


(160,533)

(134,869)

(135,231)

(101,557)

Surplus (deficit) in the scheme

4,395

(11,546)

1,723

(9,164)

(8,111)

Gain (loss) on scheme assets

8,110

3,405

1,318

25,208

(25,316)

Gain (loss) on scheme liabilities

7,193

(18,865)

7,804

(26,751)

(2,531)

Total actuarial gain (loss) in year


15,303

(15,460)

9,122

(1,543)

(27,847)

Cumulative amount of loss recognised in SOFA

(8,470)

(23,773)

(8,313)

(17,435)

(15,892)

Associated charities
















Fair value of scheme assets

14,263

13,018

12,880

12,143

11,133

Defined benefit obligation

(17,461)


(15,985)

(15,194)

(16,195)

(11,867)

Deficit in the scheme

(3,198)

(2,967)

(2,314)

(4,052)

(734)

Gain (loss) on scheme assets

756

(402)

156

2,288

(1,286)

(Loss) gain on scheme liabilities

(1,124)

(413)

1,034

(3,856)

(121)

Total actuarial (loss) gain in year

(368)


(815)

1,190

(1,568)

(1,407)

Cumulative amount of loss recognised in SOFA

(3,156)

(2,788)

(1,973)

(3,163)

(1,595)


The historical scheme information under “Associated charities” for 2009 excludes some information relating to CVV as this was not available.


22. Group commitments


a. Capital

At the year-end, RNIB has no outstanding commitments (2012: £nil). At the year-end Action has outstanding commitments amounting to £84,800 (2012: £68,800). At the year-end CVV has no outstanding commitments (2012: £1,150,000).

b. Operating leases

At the year-end, the Group had the following annual commitments amounting to £1,503,000 (2012: £1,587,000) under non-cancellable operating leases.






2013


£’000


2012

£’000

Land and buildings







Expiring within one year

16

114

Expiring between two and five years

934

694

Expiring after five years

220

439

Vehicles







Expiring within one year

30

66

Expiring between two and five years

199

199

Equipment







Expiring within one year

15

6

Expiring between two and five years

89

69


Total

1,503

1,587



23. Contingent liabilities


As at 31 March 2013 other than the Pensions Trust Growth Plan contingent liability disclosed in the “Pension costs” note (Note 21) there is a liability in respect of CVV relating to the Cardiff and Vale County Council Pension Scheme additional employers contributions amounting to £62,800 (2012: £59,800).

24. Grants receivable


During the year, RNIB received a number of grants and other funding resources, which are required by the donors to be shown in our annual financial statements.

Source

Purpose


£’000

Big Lottery Fund

AdvantAGE Wales Eye Patient Advocacy Service


118

 

Empowering Young People Programme: Realise


25

 

Lisburn in Focus Northern Ireland


140

 

Silver Dreams Programme: Older People Taking Control (OPTiC)


56

 

Supporting Change and Impact: SEED (Social Enterprise and Employment Development)

4

Big Lottery Fund - Reaching Communities

SEED (Social Enterprise and Employment Development)


24

 

Talk and Support – Supporting our Volunteers through Mentoring


8

Big Lottery Fund - Research Programme

ENABLER


144

Heritage Lottery Fund

A Sense of the Past Northern Ireland


10

 

All Our Stories Programme – Insight into the Past


10

European Social Fund

Eye Work


171

Special EU Programmes

Sensory Engagement Programme


524

European Union (Lifelong Learning)

VISAL


28

Alcon

Eye Health Projects


10

 

Vision Conference


8

Allergan

Eye Health Projects


33

 

Vision Conference

32

 

Talking Books


28

Arts Council England

Opening Up Creative Culture


67

Baily Thomas Charity

South Wales VILD Pilot Project


2

Bayer

Eye Health Projects


99

 

Understanding Wet AMD Application Development


29

BBC Children in Need

Building parent and peer support for blind and partially sighted children


18

Billmeir CT

General support


5

Carmen Butler Charteris CT

General support


35

Creative Scotland

Insight Outdoors


15


Source

Purpose


£’000

DCELLS

The Production of Welsh Language Curriculum Materials in Multi-media Format

81

Department of Health (Innovation, Excellence and Strategic Development)

Finding Your Feet - The Next Steps


32

 

Bradford Community Engagement Project


48

 

Commissioning for Effectiveness and Efficiency


92

 

Search Project


49

Dyslexia Action

Load2Learn Project


293

Fozzard CT

Loughborough Minibus


11

 

Northwood Physiotherapy equipment


8

G C Gibson CT

Talking Books


6

HMRC

HMRC Right First Time Project


65

Ian Karten Trust

Bristol Team Equipment


22

John Atcheson Foundation

Simon Dickey Music Project


16

Kathleen Beryl Sleigh CT

RNIB Loughborough College minibus

5

Loppylugs & Barbara Morrison CT

General support


6

Macrobert Trust

Insight Radio Training Academy


5

Next

Helpline


10

Novartis Pharmaceuticals UK Ltd

Eye Health Projects


61

 

Device Research Project


70

 

Vision Conference


8

Pfizer

Glaucoma Comcordance


3

Qualcomm

Qualcomm Trainee


25

Miss S E Robinson CT

Talking Books


6

Roger de Haan CT

Telebefriending service running costs


5

Shared Care Scotland

Better Breaks Development Fund


38

SSE Energy Supply Ltd

Energy Saving Advice


15

Thornton Foundation

General support

5

Voluntary Action Fund

Glasgow Third Sector Transformation Fund


25


Source

Purpose


£’000

Wales Council for Voluntary Action (Part funded by Welsh Government)

The Engagement Gateway


2

 

Volunteering in Wales


21

Welsh Assembly Government

Children's and Family Organisation Grants (CFOG)


47

 

Children’s Low Vision


36

 

S64 - Employment Advice and Support


29

Welsh Assembly Government Communities 2.0

Get Connected – Digital Inclusion for Blind and Partially Sighted People


78

Policy on relationships with pharmaceutical companies

RNIB provides services to those with sight problems, works to prevent avoidable blindness, and campaigns for positive change. These functions will not be influenced in any way by our relationship with pharmaceutical companies or by acceptance of grants or sponsorships from them. We will withdraw from any initiative that jeopardises our independence.
RNIB will not embark on, or continue with, any sponsorship arrangement or collaborative venture which might damage its independence.
Alcon, Allergan, Bayer, Novartis Pharmaceuticals UK Ltd and Pfizer are all pharmaceutical companies.




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