The FRS and IAS calculations are a prescribed approach set out by the Financial Reporting Council and the International Accounting Standards and are used to declare pension liabilities for employers that participate in defined benefit schemes such as the North East Scotland Pension Fund. These calculations are carried out by the scheme actuary Mercer in line with when your year end falls.
The cost of the calculations will depend on whether you have had a calculation carried out before and when your Year End is. If you have not previously had a calculation done, the cost will be around £2050 however in subsequent years this will be between £350 and £500.
Results take 4-6 weeks however if you do need your results back by a certain date, please let us know and Mercer will do their best to accommodate this.
Please first refer to the documents that are provided alongside your results. Mercer try to give you as much information as possible to answer any queries. If you cannot find the answer within the documents then you should contact the Employer Relationship Team in the first instance and we will try to answer your queries. If there is something that we cannot answer, we will then go to Mercer. You should be aware that any queries that are sent to Mercer will incur extra costs.
You should discuss with your auditor if you require these calculations to be carried out.
The Fund’s main role is to provide the required data to Mercer so they can carry out the calculations for you. We will send the data to you, the employer, for checking first before we send this away. The Fund does not use or require your results for any purpose. We also have no influence over the methodology or standard assumptions used.
You can use bespoke assumptions for the calculations and this should be discussed with your auditor. You should let the Employer Relationship Team know as soon as you decide what the assumptions should be to stop any delay in receiving your results.
Liabilities held for each employer are determined by the discount rate and in both IAS19 and FRS101/102, the discount rate is set by the value of High Quality Corporate Bond Yields. The liability calculation is very sensitive to any changes in the discount rate. This put simply means that the lower the discount rate, the higher the value of the liabilities. At the last triennial valuation, the methodology used was changed to using real returns to determine the discount rate rather than using bonds as we had done previously therefore the results cannot be compared.