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Rothschild & Co | Annual Report 2017
157
1. Overview
4. Financial statements
3.
Management report
2. Business review
Movement in net defined benefit obligation
In thousands of euro
Plan (assets) Defined benefit
obligations
Net defined
benefit liability
As at 1 April 2017
(1,309,882)
1,376,007
66,125
Current service cost (net of contributions paid by other plan participants)
–
11,009
11,009
Contributions by the employees
(2,470)
2,470
–
Past service costs
–
286
286
Curtailments
–
263
263
Interest (income)/cost
(20,764)
22,650
1,886
Remeasurements due to:
– actual return less interest on plan assets
(32,165)
–
(32,165)
– changes in financial assumptions
–
27,122
27,122
– changes in demographic assumptions
–
(11,199)
(11,199)
– experience (gains)/losses
–
4,883
4,883
Benefits paid
38,951
(38,951)
–
(Contributions) by the Group
(29,918)
–
(29,918)
Administration expenses
314
–
314
Exchange and other differences
60,526
(65,383)
(4,857)
AS AT 31 DECEMBER 2017
(1,295,408)
1,329,157
33,749
Following the March 2016 triennial actuarial valuation of the NMRP, the trustees of the defined benefit pension fund have agreed a contribution plan with
the Group to reduce the resulting deficit in accordance with pensions regulation. The aim is to eliminate the funding deficit by 2023 with €17.0 million of
additional contributions per year. In addition, participating employers in the fund have agreed to pay 46.6% of in-service members’ pensionable salaries.
It is estimated that total contributions of €48 million will be paid to the defined benefit pension schemes in the 12 months ending 31 December 2018.
The Group has assessed that no further liability arises for the NMRP, the NMROP or the RBZP under IFRIC 14 –
IAS 19 The Limit on a Defined Benefit
Asset,
Minimum Funding Requirements and their Interaction. This conclusion was reached because the trustees of the NMRP and NMROP funds do not
have a unilateral power to wind up the fund and the fund’s rules allow the Company an unconditional right to a refund assuming the gradual settlement
of plan liabilities over time until all members have left the Fund. Meanwhile, the plan assets of the RBZP contain a repurchase value of CHF4.5 million,
resulting from a reinsurance contract with Zurich Insurance Company Ltd, Zurich (Zurich Insurance). Zurich Insurance does not have a unilateral power
to wind up the reinsurance contract.
The net pension asset in the RBZP is expected to become available to the Group because the statutory employer contributions do not fully cover the
employer service cost according to IAS 19. According to IFRIC 14, the maximum economic benefit is the capitalised value of the difference between the
employer service cost and the expected employer’s contributions to the fund for the following financial year.
The weighted average projected maturity of the Fund’s liabilities is 20 years for the NMRP and 17 years for the main RBZP.
Amounts recognised in the income statement relating to defined benefit post-employment plans
In thousands of euro
31/12/2017 31/03/2017
Current service cost (net of contributions paid by other plan participants)
11,009
15,824
Net interest cost
1,886
2,789
Negative past service cost
286
(213)
Administration costs
314
2,031
Curtailments
263
–
Other pension income
–
(34)
TOTAL (included in staff costs)
13,758
20,397