9. Retirement benefits
9.1. Defined benefit pension scheme
The valuation of the defined benefit scheme used for the purposes of FRS 102 disclosures is based on data provided by the scheme administrator, Mercer (Ireland) Limited. The valuation is determined by an independent actuary to take account of the requirements of FRS 102 in order to assess the liabilities at the Statement of Financial Position date. Scheme assets are stated at their fair value at the Statement of Financial Position date.
9.2. Change in defined benefit obligation
| Note | 2016 €'000 |
2015 €'000 |
|
|---|---|---|---|
| Defined benefit obligation at beginning of year | 131,378 | 123,342 | |
| Charge arising from employee service in reporting period | 13,985 | 15,737 | |
| (Gain) on curtailments / changes / introductions | (865) | - | |
| Interest expense | 3,688 | 2,837 | |
| Benefit payments | 679 | 49 | |
| Participant contributions | 1,520 | 1,484 | |
| Insurance premiums | (244) | (241) | |
| Effect of changes in assumptions | 30,289 | (16,723) | |
| Effect of experience adjustments | (7,667) | 4,893 | |
| Defined benefit obligation at end of year | 9.4 | 172,763 | 131,378 |
9.3. Change in fair value of plan assets
| Note | 2016 €'000 |
2015 €'000 |
|
|---|---|---|---|
| Fair value of plan assets at end of prior year | 112,455 | 97,805 | |
| Interest income | 3,304 | 2,362 | |
| Employer contributions | 9,112 | 8,451 | |
| Participant contributions | 1,520 | 1,484 | |
| Benefit payments from plan assets | 679 | 49 | |
| Insurance premiums for risk benefits | (244) | (241) | |
| Return on plan assets (excluding interest income) | 4,275 | 2,545 | |
| Fair value of plan assets at end of year | 9.4 | 131,101 | 112,455 |
Plan Assets |
% |
% |
|
| The asset allocations at the year-end were as follows: | |||
| Equities | 48.92 | 53.80 | |
| Debt securities | 32.47 | 31.78 | |
| Property | 3.99 | 4.39 | |
| Alternatives | 9.53 | 9.95 | |
| Cash | 5.09 | 0.08 | |
| 100.00 | 100.00 | ||
| 2016 €'000 |
2015 €'000 |
||
| Actual return on scheme assets | 7,579 | 4,907 |
9.4. Scheme deficit
| Note | 2016 €'000 |
2015 €'000 |
|
|---|---|---|---|
| Defined benefit obligation | 9.2 | (172,763) | (131,378) |
| Fair value of plan assets | 9.3 | 131,101 | 112,455 |
| Net defined benefit liability | (41,662) | (18,923) | |
Amounts in the Statement of Financial Position |
|||
| Retirement benefit obligations | (41,662) | (18,923) | |
| Deferred retirement benefit funding | 6 | 41,662 | 18,923 |
9.5. Cost relating to defined benefit plans
Amount recognised in the Statement of Income and Expenditure is as follows:
| Note | 2016 €'000 |
2015 €'000 |
|
|---|---|---|---|
| Charge arising from employee service in reporting period | 8.1 | 13,120 | 15,737 |
Interest expense on defined benefit obligation |
3,688 |
2,837 |
|
| Interest (income) on plan assets | (3,304) | (2,362) | |
| Net interest expense | 7.1 | 384 | 475 |
9.6. Actuarial (loss) / gain
Remeasurements recognised in Other Comprehensive Income are as follows:
| 2016 €'000 |
2015 €'000 |
|
|---|---|---|
| Effect of changes in assumptions | (30,289) | 16,723 |
| Effect of experience adjustments | 7,667 | (4,893) |
| Return on plan assets (excluding interest income) | 4,275 | 2,545 |
| Remeasurements included in Other Comprehensive Income | (18,347) | 14,375 |
9.7. Principal actuarial assumptions
The principal actuarial assumptions used were as follows:
| Weighted average assumptions used to determine benefit obligations: | 2016 % |
2015 % |
|---|---|---|
| Discount rate | 2.1 | 2.8 |
| Rate of salary increase | 2.5 | 2.5 |
| Rate of price inflation | 1.5 | 1.5 |
| Rate of pension increase | 1.5 / 2.5 | 1.5 / 2.5 |
Weighted average assumptions used to determine pension cost: |
% |
% |
| Discount rate | 2.8 | 2.3 |
| Expected long-term return on scheme assets | 2.8 | 2.3 |
| Rate of salary increase | 2.5 | 2.5 |
| Rate of price inflation | 1.5 | 1.5 |
| Rate of pension increase | 1.5 / 2.5 | 1.5 / 2.5 |
Weighted average life expectancy at age 60 for mortality tables used to determine benefit obligations: |
Years |
Years |
| Future Pensioners | ||
| - Male (current age 45) | 30.5 | 30.4 |
| - Female (current age 45) | 32.7 | 32.6 |
| Current pensioners | ||
| - Male (current age 60) | 28.8 | 28.6 |
| - Female (current age 60) | 30.9 | 30.7 |
Weighted average life expectancy at age 65 for mortality tables used to determine benefit obligations: |
Years |
Years |
| Future Pensioners | ||
| - Male (current age 45) | 26.1 | 26.0 |
| - Female (current age 45) | 28.2 | 28.1 |
| Current pensioners | ||
| - Male (current age 65) | 23.8 | 23.7 |
| - Female (current age 65) | 25.9 | 25.8 |