Actuarial Investment Return Assumptions (Most recent valuation) Investment Return Assumptions: The Investment return assumptions applied in the most recent valuation (March 2010) are shown below: Return on long dated gilts 4.5% Asset Outperformance Assumption 1.6% p.a. Financial 31 March 2007 31 March 2010 assumptions Funding basis Funding basis Gilts basis (%pa) (%pa) (%pa) Discount rate 6.1% 6.1% 4.5% Price inflation* 3.2% 3.3% 3.3% Pay increases** 4.7% 5.3% 5.3% Pension increases: pension in excess of 3.2% 3.3% 3.3% GMP post-88 GMP 2.8% 2.8% 2.8% pre-88 GMP 0.0% 0.0% 0.0% Revaluation of 3.2% 3.3% 3.3% deferred pension Expenses 0.4% 0.5% 0.5% * Price inflation was based on RPI at 2007 now based on CPI at 2010 – ** An allowance is also made for promotional pay increases. Note that the assumption at 31 March 2010 is actually 1% p.a. for 2010/11 and 2011/12, reverting to 5.3% p.a. thereafter.
Actuarial Investment Return Assumptions (Most recent valuation) Investment Return Assumptions: The Investment return assumptions applied in the most recent valuation (March 2010) are shown below: Return on long dated gilts 4.5% Asset Outperformance Assumption 1.6% p.a. Financial assumptions 31 March 2007 Funding basis (%pa) 31 March 2010 Funding basis (%pa) Gilts basis (%pa) Discount rate 6.1% 6.1% 4.5% Price inflation* 3.2% 3.3% 3.3% Pay increases** 4.7% 5.3% 5.3% Pension increases: pension in excess of GMP 3.2% 3.3% 3.3% post-88 GMP 2.8% 2.8% 2.8% pre-88 GMP 0.0% 0.0% 0.0% Revaluation of deferred pension 3.2% 3.3% 3.3% Expenses 0.4% 0.5% 0.5% * Price inflation was based on RPI at 2007 – now based on CPI at 2010 ** An allowance is also made for promotional pay increases. Note that the assumption at 31 March 2010 is actually 1% p.a. for 2010/11 and 2011/12, reverting to 5.3% p.a. thereafter.
Final-11-12-CCC-Annual-Accounts-and-Report-20121-21.docx