For a defined benefit scheme, the liability recorded in the balance sheet is the present value of the defined obligation at that date. The defined benefit obligation is calculated on an annual basis by independent actuaries.
Actuarial gains and losses are recognised in full in the period in which they occur and are shown in Other Comprehensive Income.
Current and past service costs, along with settlements or curtailments, are charged to the Income Statement. Interest on pension plan liabilities are recognised within finance expense.
Employer Pension Obligations
The Company has agreed to fund a defined benefit pension scheme in respect of key employees. The most recent actuarial valuation on the obligations of £2,414,000 (2023 - £2,212,000) was on 30/09/2024. During the year the expense incurred was £122,000 (2023 - £16,000)
The principal assumptions used are:
- Discount rate - 5.1%
- Inflation RPI - 3.3%
- Inflation CPI - 2.4%
- Pre and Post Retirement mortality - S4PMA tables with improvements in the CMI 2023 model and a long term rate of improvement of 1%
2024 / 2023
Present value of defined benefit obligation £2,414,000 / £2,212,000
Fair value of scheme assets £0 / £0
Liability recognised in the balance sheet £2,414,000 / £2,212,000
Movements in the present value of the defined benefit obligations were as follows:
2024
At the beginning of the year £2,212,000
Interest cost £122,000
Actuarial gains £80,000
At the end of the year £2,414,000