DEFINED BENEFIT PENSION SCHEMES

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Mildred Ward
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1 lient: rep. by: Date: Year-end: Rev. by: Date: ile No. DEINED BENEIT ENION HEME The checklist is divided into sections based on the standards being applied, only the relevant sections should be completed. ection 1 gives the requirements of R 17. ection 2 gives the disclosures recommended by the Reporting tatement: Retirement benefit disclosures. The disclosures included in the reporting statement are not compulsory; however, as they are considered to be best practice they are included in this checklist. ection 3 gives the disclosures for companies applying the RE. 1 Disclosures required by R 17 References to R 17 are to the amended December 2006 version 1.01 Any unpaid contributions to the scheme should be included in the balance sheet in creditors due within one year A defined benefit asset or liability should be shown separately on the face of the balance sheet: (a) in balance sheets prepared in accordance with format 1, after item J accruals and deferred income but before K capital and reserves; (b) in balance sheets prepared in accordance with format 2: (i) show any asset after AET item D prepayments and accrued income; and (ii) show any liability after LIABILITIE item D accruals and deferred income. Note. The employer should recognise an asset to the extent that it is able to recover a surplus, either through reduced contributions in future or through refunds from the scheme. The employer should recognise a liability to the extent that it reflects a legal or constructive obligation. o. LL R R R 17.47a R 17.47a R 17.47b R 17.47b R R Where there is more than one scheme, the total of any defined benefit assets and the total of any defined benefit liabilities should be shown separately on the R R face of the balance sheet Deferred tax relating to a defined benefit asset or liability should be offset against the defined benefit asset or liability and not included with other deferred tax R R assets or liabilities The change in a defined benefit asset or liability (other than that arising from contributions to the scheme) should be analysed into: (a) periodic costs: (i) current service cost; R 17.50a R 17.50a (ii) interest cost; R 17.50b R 17.50b (iii) expected return on assets; and R 17.50c R 17.50c (iv) actuarial gains and losses. R 17.50d R 17.50d (b) Non-periodic costs: (i) past service costs; and R 17.50e R 17.50e (ii) gains and losses on settlements and R 17.50f R 17.50f curtailments. hklst 14 age 1 of 9 KMAD October 2013

2 o. LL 1.06 The net of the interest cost and the expected return on assets should be included as other finance costs (or income) adjacent to interest Actuarial gains and losses arising from any new valuation and from updating the latest actuarial valuation to reflect conditions at the balance sheet date should be recognised in the statement of total recognised gains and losses for the period ast service costs should be recognised in the profit and loss account on a straight-line basis over the period in which the increases in benefit vest Any unrecognised past service costs should be deducted from the scheme liabilities and the balance sheet asset or liability adjusted accordingly Losses arising on a settlement or curtailment not allowed for in the actuarial assumptions should be recognised in the profit and loss account at the date on which the employer becomes demonstrably committed to the transaction Gains arising on a settlement or curtailment not allowed for in the actuarial assumptions should be recognised in the profit and loss account at the date on which all parties whose consent is required are irrevocably committed to the transaction Where there is an element of a defined benefit scheme surplus which is not recognised, the amounts recognised in the performance statements should be adjusted as follows (in the order stated): R R R R R R R R R R R R (a) if any refund is agreed and is covered by the unrecognised surplus, it should be recognised as other finance income adjacent to interest, with separate disclosure in the notes; and (b) the unrecognised surplus should be applied to extinguish past service costs or losses on settlements or curtailments that would otherwise be charged in the profit and loss account for the period, with disclosure in the notes of the items and amounts so extinguished. Note. The expected return on assets should be restricted so it does not exceed the total of the current service cost, interest cost (and any past service costs and losses on settlements and curtailments not covered by the unrecognised surplus) and any increase in the recoverable surplus. Any further adjustment necessary should be treated as an actuarial gain or loss An increase in the recoverable amount of a surplus arising from an increase in the active membership of a scheme should be recognised as an operating gain. R 17.67a R 17.67a R 17.67b R 17.67b R 17.67c-d R 17.67c-d R R Disclose information that enables users of financial statements to evaluate the nature of its defined benefit schemes and the financial effects of changes in those R R schemes during the period Give a general description of the type of scheme. R 17.77a R 17.77a hklst 14 age 2 of 9 KMAD October 2013

3 o. LL 1.16 Give a reconciliation of opening and closing balances of the present value of scheme liabilities showing separately, if applicable, the effects during the period attributable to each of the following: (a) current service cost; R 17.77bi R 17.77bi (b) interest cost; R 17.77bii R 17.77bii (c) contributions by scheme participants; R 17.77biii R 17.77biii (d) actuarial gains and losses; R 17.77biv R 17.77biv (e) foreign currency exchange rate changes on schemes measured in a currency different from the R 17.77bv R 17.77bv entity's presentation* currency; (f) benefits paid; R 17.77bvi R 17.77bvi (g) past service cost; R 17.77bvii R 17.77bvii (h) business combinations; R 17.77bviii R 17.77bviii (i) curtailments; and R 17.77bix R 17.77bix (j) settlements. R 17.77bx R 17.77bx 1.17 Give an analysis of scheme liabilities showing amounts arising from schemes that are: (a) wholly unfunded; and R 17.77ci R 17.77ci (b) amounts arising from schemes that are wholly or R 17.77cii R 17.77cii partly funded Give a reconciliation of the opening and closing balances of the fair value of scheme assets showing separately, if applicable, the effects during the period attributable to each of the following: (a) expected rate of return on scheme assets; R 17.77di R 17.77di (b) actuarial gains and losses; R 17.77dii R 17.77dii (c) foreign currency exchange rate changes on R 17.77diii R 17.77diii schemes measured in a currency different from the entity's presentation currency; (d) contributions by the employer; R 17.77div R 17.77div (e) contributions by scheme participants; R 17.77dv R 17.77dv (f) benefits paid; R 17.77dvi R 17.77dvi (g) business combinations; and R 17.77dvii R 17.77dvii (h) settlements. R 17.77dviii R 17.77dviii 1.19 rovide a reconciliation of the present value of scheme liabilities in (b) and the fair value of the scheme assets in (d) to the assets and liabilities recognised in the balance sheet, showing at least: (a) any past service cost not recognised in the R 17.77ei R 17.77ei balance sheet; (b) any amount not recognised as an asset, because R 17.77eii R 17.77eii of the limit in R 17.41; and (c) any other amounts recognised in the balance R 17.77eiii R 17.77eiii sheet Disclose the total expense recognised in profit or loss for each of the following, and the line item(s) in which they are included: (a) current service cost; R 17.77fi R 17.77fi (b) interest cost; R 17.77fii R 17.77fii (c) expected return on scheme assets; R 17.77fiii R 17.77fiii (d) past service cost; R 17.77fiv R 17.77fiv (e) the effect of any curtailment or settlement; and R 17.77fv R 17.77fv (f) the effect of the limit in paragraph R 17.77fvi R 17.77fvi 1.21 Disclose the total amounts recognised in the statement of total recognised gains and losses for each of the following: (a) actuarial gains and losses; and R 17.77gi R 17.77gi hklst 14 age 3 of 9 KMAD October 2013

4 o. LL (b) the effect of the limit in paragraph 41. R 17.77gii R 17.77gii 1.22 Disclose the cumulative amount of actuarial gains and losses recognised in the statement of total recognised R 17.77h R 17.77h gains and losses. Note. The amount to be disclosed should be the amount recognised in the statement 95B of total recognised gains and losses for accounting periods ending on or after 22 June 2002 and subsequently included by prior year adjustment under paragraph 96 of the R. R 17.95b R 17.95b 1.23 or each major category of scheme assets, which includes, but is not limited to, equity instruments, debt instruments, property, and all other assets: disclose the percentage or amount that each major category constitutes of the fair value of the total scheme assets. R 17.77i R 17.77i 1.24 Disclose the amounts included in the fair value of scheme assets for: (a) each category of the entity's own financial R 17.77ji R 17.77ji instruments; and (b) any property occupied by, or other assets used R 17.77jii R 17.77jii by, the entity Give a narrative description of the basis used to determine the overall expected rate of return on assets, including the effect of the major categories of scheme R 17.77k R 17.77k assets Disclose the actual return on scheme assets. R 17.77l R 17.77l 1.27 Give the principal actuarial assumptions used as at the balance sheet date, including, when applicable: (a) the discount rates; R 17.77mi R 17.77mi (b) the expected rates of return on any assets of the R 17.77mii R 17.77mii scheme for the periods presented in the financial statements; (c) the expected rates of salary increases (and of R 17.77miii R 17.77miii changes in an index or other variable specified in the formal or constructive terms of a scheme as the basis for future benefit increases); (d) retirement healthcare cost trend rates; and R 17.77miv R 17.77miv (e) any other material actuarial assumptions used. R 17.77mv R 17.77mv Note. An employer shall disclose each actuarial assumption in absolute terms (for example, as an absolute percentage) and not just as a margin between different percentages or other variables Disclose the effect of an increase of one percentage point and the effect of a decrease of one percentage point in the assumed retirement healthcare cost trend rates on: (a) the aggregate of the current service cost and interest cost components of net periodic retirement R 17.77ni R 17.77ni healthcare costs; and (b) the accumulated retirement healthcare obligation R 17.77nii R 17.77nii for healthcare costs. hklst 14 age 4 of 9 KMAD October 2013

5 o. LL Note. or the purposes of this disclosure, all other assumptions shall be held constant. or schemes operating in a high inflation environment, the disclosure shall be the effect of a percentage increase or decrease in the assumed healthcare cost trend rate of a significance similar to one percentage point in a low inflation environment Disclose the amounts for the current accounting period and previous four accounting periods of: (a) the present value of the scheme liabilities, the fair value of the scheme assets and the surplus or deficit in the scheme; and (b) the experience adjustments arising on: (i) the scheme liabilities expressed either as (1) an amount or (2) a percentage of the scheme liabilities at the balance sheet date; and (ii) the assets of the scheme expressed either as (1) an amount or (2) a percentage of the assets of the scheme at the balance sheet date. Note. The above requirement changes paragraph 16 of the R and requires quoted securities to be valued at current bid-price. An entity is not required to restate corresponding amounts for the first two of the previous four accounting periods required by paragraph 77(o). Where an entity selects not to restate corresponding amounts it should disclose that corresponding amounts are not restated Give the employer's best estimate, as soon as it can reasonably be determined, of contributions expected to be paid to the scheme during the accounting period beginning after the balance sheet date rovide disclosures that explain the effect of changes in the cheme liabilities arising from the replacement of RI with I, consistent with objective of R 17 of ensuring that the financial statements contain adequate disclosure of the cost of providing retirement benefits and the related gains, losses, assets and liabilities. R 17.77oi R 17.77oi R 17.77oiiA R 17.77oiiA R 17.77oiiB R 17.77oiiB R 17.95c R 17.95c R 17.77p R 17.77p UIT UIT Disclosures recommended by the Reporting tatement: Retirement benefit disclosures. These disclosures are not compulsory; however, as they are considered to be best practice they are included in this checklist. References in this section are to paragraph numbers in the reporting statement. aragraphs in bold are key principles, other paragraphs provide more detailed guidance The financial statements should disclose information that enables the users of the financial statements to understand the relationship between the reporting entity and the trustees (managers) of defined benefit schemes. R.4 R.4 hklst 14 age 5 of 9 KMAD October 2013

6 o. LL 2.02 The financial statements should include sufficient information about the principal assumptions the entity has used to measure scheme liabilities to allow users to understand the inherent uncertainties affecting the measurement of scheme liabilities. These assumptions should include, where this is not otherwise required by R 17, mortality rates. R.8 R Information provided in the financial statements should communicate in a clear and effective manner the number of years post retirement it is anticipated pensions will be paid to members of the defined benefit scheme. Where the number of years assumed differs depending on geographical, demographical or other significant reasons, the different mortality rates should be separately disclosed. R.10 R Where it is anticipated a change in mortality rates could have a material effect on the measurement of the scheme liabilities a sensitivity analysis (see below) should be provided The financial statements should disclose a sensitivity analysis for the principal assumptions used to measure the scheme liabilities, showing how the measurement of scheme liabilities would have been affected by changes in the relevant assumption that were reasonably possible at the balance sheet date. R.11 R.12 R.11 R.12 Note: or the purposes of this disclosure, all other assumptions should be held constant Where an entity chooses not to provide a sensitivity analysis, it may decide to provide alternative disclosures that provide greater information about the nature of scheme liabilities. uch information may include an analysis of liabilities between pensioners, deferred pensioners and employed members. R.14 R The financial statements should disclose information that enables users to understand the method of measurement used to measure scheme liabilities arising from defined benefit schemes. R.15 R Where the cost of buying out benefits is made available to trustees (managers) and/or members of defined benefit schemes it is recommended that the financial statements also disclose the cost of buying out benefits. R.17 R The ABO (Accumulated Benefits Obligation) is similar to measuring defined benefit scheme liabilities using the projected unit method but does not take into consideration future salary increases. An entity may consider it useful to disclose the ABO when explaining how scheme liabilities are measured. R.18 R The financial statements should disclose information that enables the users of financial statements to understand the funding obligations (estimated where applicable) that the entity has in relation to defined benefit schemes. R.19 R.19 hklst 14 age 6 of 9 KMAD October 2013

7 o. LL 2.11 The financial statements should disclose rates or amounts of contributions which have been agreed with the trustees (managers) of the scheme and are payable to the scheme by or on behalf of the reporting entity The funding requirements for defined benefit schemes are often regulated by legislation. An entity may be required or may choose to agree principles for funding scheme liabilities with the trustees (managers) of the scheme. The financial statements should disclose the funding principles the entity has agreed or operates with regard to defined benefit schemes Where a defined benefit scheme is in deficit and the entity has entered into an agreement with the trustees (managers) of the scheme to make additional contributions to reduce or recover the deficit, in addition to normal levels of funding, the financial statements should disclose separately the additional contributions The financial statements should also disclose separately the number of years over which it is anticipated the additional contributions will be paid to the defined benefit scheme in order to recover or reduce the deficit In order to evaluate the economic resources available to the entity, users of financial statements are particularly interested in the period of time over which the liabilities of the defined benefit scheme mature. A measure of this is the duration of scheme liabilities, which should be disclosed in the financial statements In addition to the duration of liabilities, the financial statements should disclose information that allows users to understand the projected cash flows of defined benefit schemes. This information might usefully be presented in graphical form The financial statements should disclose information that enables users of financial statements to evaluate the nature and extent of the risks and rewards arising from the financial instruments held by defined benefit schemes at the balance sheet date. R.26 R or each type of risk arising from financial instruments held by defined benefit schemes, an entity may disclose: (a) the exposures to risk and how they arise; R.27a R.27a (b) the objectives, policies and processes undertaken R.27b R.27b by the defined benefits scheme or the entity for managing the risk and the methods used to measure the risk; and (c) any changes in (a) or (b) from the previous period. R.27c R.27c R.21 R.22 R.23 R.23 R.24 R.25 R.21 R.22 R.23 R.23 R.24 R.25 hklst 14 age 7 of 9 KMAD October 2013

8 o. LL 2.19 An entity may disclose a sensitivity analysis, such as value-at-risk, for types of risks to which the defined benefit scheme is exposed. Where an entity discloses such sensitivity analysis it should also disclose the method and assumptions used in preparing this analysis and any changes from the previous period in the methods and assumptions used R 17 paragraph 77(i) (IA 19 paragraph 120A(j)) requires an entity to disclose for each major category of scheme assets the percentage or amount that each major category constitutes of the fair value of the total scheme assets. It is recommended that this disclosure includes the expected rate of return assumed for each major category of scheme assets for the period presented The assumption made for the expected return on assets does not affect the valuation of the scheme assets because they are measured at fair value. It does, however, determine the amount to be recognised in the profit and loss account. 3 Disclosures for companies applying the RE 3.01 Any unpaid contributions to the scheme should be presented in the balance sheet as a creditor due within one year The defined benefit asset or liability should be presented separately on the face of the balance sheet: R.28 R.29 R.30 RE App 2.1g R.28 R.29 R.30 RE App 2.1g (a) or format 1: after item J Accruals and deferred income but before item K apital and reserves. RE App 2.1gi RE App 2.1gi (b) or format 2: any asset after AET item D repayments and accrued income and any liability after LIABILITIE item D Accruals and deferred income. Note. The employer should recognise an asset to the extent that it is able to recover a surplus either through reduced contributions in the future or through refunds from the scheme. The employer should recognise a liability to the extent that it reflects its legal or constructive obligation The deferred tax relating to the defined benefit asset or liability should be offset against the defined benefit asset or liability and not included with other deferred tax assets or liabilities The components of the change in the defined benefit asset or liability (other than those arising from contributions to the scheme) should be presented separately in the performance statements as follows: RE App 2.1gii RE App 2.1f RE App 2.1h RE App 2.1gii RE App 2.1f RE App 2.1h (a) the current service cost should be included within operating profit in the profit and loss account; RE App 2.1i(i) RE App 2.1i(i) (b) the net of the interest cost and the expected return on assets should be included as other finance costs (or income) adjacent to interest; (c) actuarial gains and losses should be recognised in the statement of total recognised gains and losses; RE App 2.1i(ii) RE App 2.1i(iii) RE App 2.1i(ii) RE App 2.1i(iii) hklst 14 age 8 of 9 KMAD October 2013

9 o. LL (d) past service costs should be recognised in the profit and loss account in the period in which the increases in benefit vest; and (e) losses arising on a settlement or curtailment should be recognised in the profit and loss account when the employer becomes demonstrably committed to the transaction (gains should only be recognised once all parties whose consent is required are irrevocably committed) Disclose: (a) the nature of the scheme (i.e., defined benefit); (b) the date of the most recent full actuarial valuation on which the amounts in the accounts are based; (c) if the actuary is an employee or officer of the reporting entity or of the group of which it is a member, state this fact; (d) the contribution made in respect of the accounting period and any agreed rates for future years; and (e) for closed schemes and those in which the age profile of the active membership is rising significantly, the fact that under the projected unit method, the current service cost will increase as the members of the scheme approach retirement Disclose the following in a note to the accounts: (a) the fair value of the scheme assets; (b) the present value of the scheme liabilities based on the accounting assumptions; (c) the resulting surplus or deficit Where the asset or liability in the balance sheet differs from the surplus or deficit in the scheme, provide an explanation of the difference Give an analysis of the movements during the period in the surplus or deficit in the scheme. RE App 2.1i(iv) RE App 2.1i(v) RE App 2.1j(i) RE App 2.1j(ii) RE App 2.1j(ii) RE App 2.1j(iii) RE App 2.1j(iv) RE App RE App RE App RE App RE App RE App 2.1i(iv) RE App 2.1i(v) RE App 2.1j(i) RE App 2.1j(ii) RE App 2.1j(ii) RE App 2.1j(iii) RE App 2.1j(iv) RE App RE App RE App RE App RE App hklst 14 age 9 of 9 KMAD October 2013

Brazos Higher Education Authority, Inc. Quarterly Student Loan Report. Indenture 1999 Securing the 2011 Notes

Brazos Higher Education Authority, Inc. Quarterly Student Loan Report Indenture 1999 Securing the 2011 Notes Reporting Period October 1, 2018 through December 31, 2018 I DEAL PARAMETERS Student Loan Portfolio