Note 3 Assumptions made about the future and other major sources of estimation uncertainty The Statement of Accounts contains estimated figures Item Uncertainties Effect if Actual Results Differ from that are based on assumptions made about the future. Assumptions Estimates are made taking into account historical Pensions Liability Estimation of the net liability to pay Whilst the effects on the net pensions liability of experience, current trends and other relevant factors. pensions is extremely volatile as it changes in individual assumptions can be However, because figures cannot be determined with depends on a number of complex measured, the assumptions interact in complex certainty, actual results could be materially different judgements relating to the discount ways. from the assumptions and estimates. rate used, the rate at which salaries are projected to increase, changes in During 2017/18, the Actuaries advised that the net The items in the Chief Constable’s Balance Sheet as at retirement ages, mortality rates and 31 March 2018 for which there is a significant risk of pensions liability has decreased by approximately material adjustment in forthcoming years are as expected returns on pension fund £54m as a result of estimates being revised and follows: assets. updating financial and demographic assumptions. Actuaries are engaged to provide the This is reported on the Group Income and PCC with expert advice about the Expenditure Statement and further information is assumptions to be applied for each of provided in the pensions note. its pension schemes.
Note 3 Assumptions made about the future and other major sources of estimation uncertainty Item Uncertainties Effect if Actual Results Differ from Assumptions Pensions Liability Estimation of the net liability to pay pensions is extremely volatile as it depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets. Actuaries are engaged to provide the PCC with expert advice about the assumptions to be applied for each of its pension schemes. Whilst the effects on the net pensions liability of changes in individual assumptions can be measured, the assumptions interact in complex ways. During 2017/18, the Actuaries advised that the net pensions liability has decreased by approximately £54m as a result of estimates being revised and updating financial and demographic assumptions. This is reported on the Group Income and Expenditure Statement and further information is provided in the pensions note. The Statement of Accounts contains estimated figures that are based on assumptions made about the future. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because figures cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. The items in the Chief Constable’s Balance Sheet as at 31 March 2018 for which there is a significant risk of material adjustment in forthcoming years are as follows:
syp-force-annual-accounts-2017-18-draft-new-format.docx