Pension Scheme of European Officials (PSEO)

Transcription

1 Eurostat Unit C3 - Statistics for administrative purposes Luxembourg, 29 June 2015 Meeting of the Working Group on Article 83 of the Staff Regulations Luxembourg, 27 June 2014, 9:30 a.m.,bech Building, Quételet Room Pension Scheme of European Officials (PSEO) Defined Benefit Obligation (DBO) at Documents will be made available via CIRCABC Item 5 of the agenda

2 TABLE OF CONTENTS 1. Introduction Summary of calculations Preliminary remarks DBO valuation DBO change Variables used in the DBO calculation Analysis of the DBO change Change concerning new members of the pension scheme Change concerning the characteristics of the constant population Change in actuarial assumptions Change in methodology and other changes Independent examination Annex Details about population and main actuarial assumptions Reference population Real Discount Rate (RDR) General Salary Growth (GSG) Individual Salary Progression (ISP) Life table Matrimonial coefficients for active officials Assumed retirement age Turnover Other assumptions

3 1. Introduction The European Communities operate a defined benefit pension plan. A defined benefit plan is a pension plan that generally defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and remuneration. Staff contribute one third of the expected cost of these benefits from their salaries, this expected cost being determined under a set of specific rules and assumptions which are defined in the Staff Regulations of Officials of the European Communities. While Article 83 of the Staff Regulations specifies that "benefits paid under this pension scheme shall be charged to the budget of the Communities. Member States shall jointly guarantee payment of such benefits in accordance with the scale laid down for financing such expenditure", the liability is not funded. Article 83 also states that "Officials shall contribute one third of the cost of financing this pension scheme" The liability recognised in the Budget of the Communities is called the "Defined Benefit Obligation" (DBO) at the assessment date, less the fair value of any plan assets. This DBO is determined by discounting the estimated future cash outflows attributed to past services using a discount rate based on interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. The rules concerning the PSEO (Pension Scheme of European Officials) are defined by the version of the Staff Regulations of Officials of the European Communities in force from 1 January The arrangements cover the various types of pensions and allowances (retirement, invalidity, survival). The rules regarding the staff pensions are directly applicable in all Member States. Eurostat was requested by DG BUDG to calculate the DBO of the pension scheme for inclusion in the Annual Accounts of the European Communities. 2

4 2. Summary of calculations 2.1. Preliminary remarks The DBO of the PSEO was valuated on the basis of the member population at 31 December 2014 and the applicable rules in the Staff Regulations in force from the This valuation covered the benefits connected with seniority, invalidity and survival (different types of pensions as well as invalidity allowance), benefits related to family allowances, death before retirement and the effect of country correction coefficients applied to pensions paid, as provided for in the Staff Regulations. The valuation was carried out in accordance with the IPSAS 25 methodology. This accounting standard requires the employer to determine his actuarial commitment on an ongoing basis, taking into account both the promised benefits during the active lifetime of employees, and foreseeable increases in salaries. The actuarial valuation method used to calculate this DBO is known as the projected unit credit method DBO valuation The Defined Benefit Obligation (DBO) of the PSEO at has been valued at , including the DBO of family allowances and the effect of correction coefficients. The table below details the DBO by population type. Further details are shown in the following sections. Table I. DBO breakdown at Population Active staff 32,639,039, Deferred pensions 151,818, Retired non contribuiting members 17,252,847, Retired contribuiting members 9,283, Invalids 2,729,816, Survivors 1,844,220, Total DBO of Pensions DBO of Family allowances Total DBO Correction coefficients effect (CC) Total DBO, CC included

5 2.3. DBO change The gross DBO liability (correction coefficient included) at 31 December 2014 ( million ) has been compared with the one at 31 December 2013 ( million ). Table II summarizes the main facts having an effect on the liability change: Table II. Main variables and Gross DBO Item Change Main variables: Total PSEO member population Real Discount Rate (RDR) 1.8% 0.7% -1.1% General Salary Growth (GSG) -0.2% -0.2% 0.0% Life Table ICSLT 2013 ICSLT Gross DBO (million ) : DBO of pensions DBO of Family allowances Correction coefficients effect (CC) Total DBO, CC included The total DBO increased by million. A detailed explanation of the liability change is given in point Variables used in the DBO calculation All the variables used for the PSEO DBO calculation are the same as those used for the officials' pension contribution rate calculation, exception made for the discount rate (the reference accounting standard IPSAS 25 requires the nominal discount rate to be the rate of government bonds as at the valuation date). 4

6 Two kinds of variables are used: Parameters - These are values mainly linked to the application of the Staff Regulations. They change according to certain conditions related to the individual situation of each official (e.g. the annual accrual rate is 2% for staff recruited before 1 May 2004, 1.9% for staff recruited between 1 May 2004 and 31 December 2013, 1.8% for staff recruited after 1 January 2014). Parameters can be clearly established. Table III. Summary of main parameters Parameter Value Legal source Staff Regulations in force from Reference date for the population (Annex XII Article 1) Maximum retirement age (Staff Regulations Article 52) Normal retirement age (Staff Regulations Article 52 and Annex XIII Article 22) Minimum retirement age (Staff Regulations Article 52(b), Annex VIII Article 9 and Annex XIII Article 23) Category and grade for the minimum subsistence figure (Annex VIII Article 6) Maximum retirement pension (Staff Regulations Article 77) Annual accrual rate (Article 77 of the Staff Regulations and Article 21 of Annex XIII) Bonus for officials in service after the normal retirement age (Annex VIII Article 5 and Annex XIII Article 22) Penalty for early retirement (Annex VIII, Article 9 and Annex XIII, Article 22, point 3) Minimum retirement pension (Staff Regulations Article 77) Invalidity allowance (Staff Regulations Article 78) Minimum invalidity allowance (Staff Regulations Article 78) Reversion pension (Staff Regulations Article 79 and Annex VIII Article 18) Minimum reversionary pension (Staff Regulations Article 79 and Annex VIII Article 18) Survivor's pension (Staff Regulations Article 79 and Annex VIII Article 17) Minimum survivor's pension (Staff Regulations Article 79) (automatically officials in service before ), 66 (automatically new officials) or 67 (at the staff' request) or until 70 (exceptionally) 60 to 66 depending on years' service, age and entry date in service 55 to 58 (officials in service before ), 58 (new officials) first step of grade 1 70% of the basic salary at the retirement date 1.8% (officials in service from ), 1.9% (officials in service from ), or 2% (officials in service before ), of BS 1.5% (new officials) or 2.5% of the BS, or 5% of the amount of the pension rights acquired at 60, depending on the entry date in service, the years of service at 1st May 2004 and the age on 1st May 2004 of the official 3.5% (new offfcials) or 1.75% (former officials) of the pension, for every year before the normal retirement age 4% of the minimum subsistence figure per year of service 70% of the basic salary 100% of the minimum subsistence figure 60% of the retirement pension 35% of the last basic salary 60% of the retirement pension that would have been payable to the official 35% of the last basic salary or minimum subsistence figure 5

7 Actuarial assumptions - These are values that are estimated by making different kind of assumptions, such as the discount rate, the GSG (General Salary Growth), ISP (Individual Salary Progression) table, the probability of being married at the retirement date, the coefficients for orphans and divorced spouses (aiming at taking into account the orphans and divorced spouses impact on the survivor's pension), etc. The values of these actuarial assumptions have been estimated according to general actuarial practices and have been discussed with the national experts from the relevant departments of the Member States at the yearly meetings of Article 83 Working Group. Table IV. Summary of the main actuarial assumptions Actuarial assumption Average age difference between married men and women Probability of being married for men Probability of being married for women Marital status Coefficient for orphan's and divorced spouse's pension Annex VIII coefficient (correction coefficient) Assumed retirement age Value 2 years 81% 49% status at evaluation date 13% 2.4% 63 (officials in service before ), 64 (officials in service from ) or 65 (officials in service from ) Expected inflation rate over the duration of the scheme 1.3% Nominal Discount rate (NDR) 2.0% Real Discount rate (RDR) 0.7% General salary growth (GSG) -0.2% General pension revaluation (GPR) Individual salary progression (ISP) Mortality table -0.2% (equal to the GSG) 2014 ISP Table ICSLT2013 6

8 Liabilities cover the rights previously defined for the following people (situation at ): Staff in active employment in all the institutions and agencies included in the PSEO; Staff in a deferred situation, i.e. who have temporarily or definitively left the Institutions but have left their pension rights in the PSEO; Former staff benefiting from a retirement pension; Former staff benefiting from an invalidity pension; Former staff benefiting from an invalidity allowance; The recipients of a survivor's pension (widows and widowers, orphans, dependants). The DBO calculation included a total of individuals split into: contributing members, beneficiaries of a retirement, invalidity or survivor's pension, 370 members who deferred the benefit of the pension until the normal retirement age. The population of members of the PSEO increased by individuals. 7

9 3. Analysis of the DBO change The presentation of the yearly liability change is in compliance with the international accounting standards. The yearly liability change is broken down into four headings: 1. Liability change due to newcomers, 2. Liability change linked to the characteristics of the constant population, 3. Actuarial gains and losses from changes on assumptions and 4. Actuarial gains and losses from changes on methodology Change concerning new members of the pension scheme New members (contributing or not) are those who joined the pension scheme between times T -1 ( ) and T 0 ( ). The total DBO between T -1 and T 0 is then increased by the amount of liability related to those newcomers, but only to the extent that these new members were neither directly nor indirectly part of the pension scheme as of T -1. New survivors are considered as indirect members of the pension scheme at T -1 and they generate an increase or decrease in the DBO only to the extent that their number is higher or lower than expected: this consideration has to be related to the expected number of deaths. New survivors are not to be considered as new members for the purpose of explanation of the change in the DBO (see table V) Change concerning the characteristics of the constant population Clearly members already present in the pension scheme at T -1, will incur in some changes at their situation between T -1 and T 0 : this fact will lead to changes of the PSEO DBO: 1. active members will acquire new pension rights related to their service during the year; in that case, the DBO, that reflect the actual value of these rights, will also increase by an amount known as service cost of the members; 2. members become one year older and furthermore the time length between the new valuation date and the date at which they will receive their future benefits is reduced by one year: The DBO increase due to the age increase of non-retired people is known as interest cost ; 3. in the course of 2014 the entitled members will receive their expected amount of benefits according to the rules of the scheme (e.g. pensions for retirees). Those "benefits paid lead to a decrease in the DBO as they are no longer to be paid in the future; 4. other changes arise from differences between what expected from the h -1 assumptions made in 2013 for 2014 and what really occurred in Those differences are known as actuarial gains and losses from experience. 8

10 With reference to the actuarial gains and losses from experience, it is useful to precise that the fact that some members (contributing or not) will leave the pension scheme at any time between T -1 and T 0 because of death or any other cause of termination, explains the DBO change between T -1 and T 0 only to the extent that the actual number of deaths during the year differs from what expected at T -1. Actually, the fact that some members would die is already taken into account in the DBO through the assumptions related to mortality through the life table. Thus: if, between T -1 and T 0, the number of deaths of PSEO members is the one expected according to the mortality assumption, no change appears in the DBO (all other parameters assumed constant); if between T -1 and T 0, the number of deaths of PSEO members differs from the one expected according to the mortality assumptions, then the DBO will increase (or decrease) during this period. This consideration is also true for any other assumption (except the discount rate) used for the DBO calculation: only differences between what expected at T -1 and what occurred between T -1 and T 0 explain the change in DBO (all other parameters being considered as constant). This amount of DBO change is known as actuarial gains and losses from experience Change in actuarial assumptions The value of some actuarial assumptions (discount rate, salary progression, etc.) used for DBO calculations made in T -1 and T 0 respectively, may be different. Changes of the discount rate have a major impact on the DBO amount (see 3.4) Change in methodology and other changes Changes in the methodology and at the actuarial assumptions are caused by events not related to the normal evolution of the pension liability. Main events may be: change in the legal basis (it has been the case of the amended Staff Regulations in force since 1 January 2014). mandatory dismissal of a high number of officials due to a HR policy aiming to the reduction of the number of officials, new obligation such as transfer of the payment of officials to their national state, additional changes may occur due to data and database updates and improvements. 9

11 The change of pensions DBO (CC excluded) between and is detailed in the table below. Table V. PSEO DBO change (CC excluded) Total DBO change Item Amounts in million % DBO at (T -1 ) 45,947.2 DBO at (T 0 ) 57,131.4 Net change (ΔL) 11, % Breakdown of the DBO change Item Amounts in million % (1) 1. Change due to newcomers % 2. DBO Change linked to the characteristics of the constant population 1, % 2.1 Service cost 2, % 2.2 Interest cost 1, % 2.3 Benefits paid -1, % 2.4 Actuarial gains and losses from experience (balance) 3. Actuarial gains and losses from changes in assumptions -1, % 11, % 3.1 Interest rate (RDR) 10, % 3.2 Life table % 3.3 General Salary Growth (GSG) % 3.4 Other changes in actuarial assumptions % 4. Actuarial gains and losses from changes in methodology and other changes -1, % Net change (ΔL) 11, % (1) % with respect to pension liability at T -1 10

12 The table above shows that the total change in DBO, correction coefficients excluded, ( million ) between the 2015 and 2014 valuations is due to: 1. The pension liability of "newcomers" (active officials and agents who started working in 2014) valued at million (1% of the DBO at ). 2. The pension liability change related to the characteristics of the constant population valued at million (2.8% of the DBO at ). This specific change can be explained by splitting up heading 2 into four sub-headings: New pension rights acquired by members during 2014 in compensation for their work: this "service cost" is valued at million (4.7% of the DBO at ), PSEO members are one year older than in the previous valuation, thus the duration between the new valuation date and the date at which they will receive their future benefits becomes one year shorter: the corresponding "interest cost" is valued at million (3.7% of the DBO at ), Beneficiaries have received their corresponding pension or allowance in 2014 according to the rules of the scheme. This benefit paid led to a DBO decrease of million (-3% of the DBO at ), Actuarial gains and losses from experience, obtained as balance of heading 2 (liability change linked to the characteristics of the constant population) and its subheadings 2.1, 2.2 and 2.3, amounted to million (2.5% of the DBO at ). 3. The pension liability increased by million due to actuarial gains and losses from changes in assumptions (+24.7% of the DBO at ). This variation is linked to: the decrease of the real discount rate (RDR) (due to the inherent volatility of the discount rate which corresponds to a market value at 31 st December of each year) from 1.8% in 2013 to 0.7% in 2014, made the liability increase by million (+23. 7% of the DBO at ); the use of the same dynamic Life Table didn't involve any changes to the liability; the General Salary Growth (GSG) remained -0.2% as in 2013, thus no changes to the liability were observed; other changes in the actuarial assumptions led to a DBO increase of million (1% of the DBO at ). 4. Finally the actuarial gains and losses due to changes in methodology or other changes, mainly linked to population update and software improvements, turned into a decrease of the DBO amounting to million (4. 2% of the DBO at ). 11

13 4. Independent examination Eurostat is being assisted by a qualified independent expert (Ernst & Young Actuaires- Conseils, Paris), with regard to the implementation of the methodology and to the definition and calculation of the corresponding actuarial assumptions. Ernst & Young has conducting an actuarial examination of the DBO as calculated by Eurostat: the conclusion of their review was that "Based on our diligences our review does not lead to any material differences. We therefore consider that the liability calculated by Eurostat as of December 31 st 2014 is the correct fair value of the PSEO liability in accordance with IPSAS 25 standards and actuarial practices". 12

14 5. Annex Details about population and main actuarial assumptions 5.1. Reference population The reference population covers active officials and beneficiaries who are members of the Pension Scheme of European Officials (PSEO), and who are working or worked in EU Institutions and Agencies or are survivor of dead officials or pensioners. The following table shows the list of the 59 institutions and agencies at whose staff is covered by the PSEO. Table VI. Institutions and Agencies members of the PSEO Abbr. Institutions or assimilated organisations Abbr. Agencies (next) COR COMMITEE OF THE REGIONS EFSA EUROPEAN FOOD SECURITY AUTHORITY CONSIL COUNCIL OF THE EUROPEAN UNION EUROFOUND EUROPEAN FOUNDATION FOR THE IMPROVEMENT OF LIVING AND WORKING CONDITIONS CDCE COURT OF AUDITORS GSA EUROPEAN GNSS AGENCY COJED COURT OF JUSTICE OF EUROPEAN COMMUNITIES EIGE EUROPEAN INSTITUTE FOR GENDER EQUALITY CSC ECONOMIC AND SOCIAL COMMITTEE EIT CEC EUROPEAN COMMISSION EIOPA EUROPEAN INSTITUTE OF INNOVATION AND TECHNOLOGY EUROPEAN INSURANCE AND OCCUPATIONAL PENSION AUTHORITY EDPS EUROPEAN DATA PROTECTION SUPERVISOR EMSA EUROPEAN MARITIME SAFETY AGENCY EO EUROPEAN OMBUDSMAN EMCDDA EUROPARL EUROPEAN PARLIAMENT EFRA Abbr. Agencies ENISA ACER FRONTEX AGENCY FOR THE COOPERATION OF ENERGY REGULATORS AGENCY FOR THE MANAGEMENT OF OPERATIONAL CO-OPERATION AT EXTERNAL BORDERS OF MEMB CEPOL EUROPOL EUROPEAN MONITORING CENTRE FOR DRUGS AND DRUG-ADDICTION EUROPEAN MONITORING CENTRE FOR RACISM AND XENOPHOBIA EUROPEAN NETWORK AND INFORMATION SECURITY AGENCY EUROPEAN POLICE COLLEGE EUROPEAN POLICE OFFICE ECSEL ECSEL JU ERA EUROPEAN RAILWAYS AGENCY SKY CLEAN SKY JOINT UNDERTAKING ERC EUROPEAN RESEARCH COUNCIL EXECUTIVE AGENCY CFCA COMMUNITY FISHERIES CONTROL AGENCY ESMA EUROPEAN SECURITIES AND MARKET AUTHORITY CPVO COMMUNITY PLANT VARIETIES OFFICE ETF EUROPEAN TRAINING FOUNDATION EACEA LISA EDUCATION, AUDIOVISUAL AND CULTURE EXECUTIVE AGENCY EU AGENCY FOR THE OPERATIONAL MANAGEMENT OF LARGE SCA LE IT SYSTEMS EACI EAHC ESA EURATOM SUPPLY AGENCY IMI FCH EXECUTIVE AGENCY FOR COMPETITIVENESS AND INNOVATION EXECUTIVE AGENCY FOR THE PUBLIC HEALTH PROGRAM FUEL CELLS AND HYDROGEN JOINT UNDERTAKING INNOVATIVE MEDICAMENTS INITIATIVE JOINT UNDERTAKING OSHA EMEA EUROPEAN AGENCY FOR SAFETY AND HEALTH AT WORK EUROPEAN AGENCY FOR THE EVALUATION OF MEDICAL PRODUCTS BBI EUROJUST OHIM BIO BASED INDUSTRIES JU JUDICIAL COOPERATION OFFICE FOR HARMONISATION IN THE INTERNAL MARKET EASO EUROPEAN ASYLUM SUPPORT OFFICE REA RESEARCH EXECUTIVE AGENCY EASA EUROPEAN AVIATION SAFETY AGENCY SESAR SESAR JOINT UNDERTAKING EBA EUROPEAN BANKING AUTHORITY BEREC ECDC CEDEFOP EUROPEAN CENTRE FOR DISEASE PREVENTION AND CONTROL EUROPEAN CENTRE FOR THE DEVELOPMENT OF VOCATIONAL TRAINING ECHA ITER/F4E THE BODY OF EUROPEAN REGULATORS FOR ELECTRONIC COMMUNICATIONS THE EUROPEAN CHEMICALS AGENCY THE EUROPEAN JOINT UNDERTAKING FOR ITER AND THE DEVELOPMENT OF FUSION ENERGY AEE EUROPEAN ENVIRONMENT AGENCY TENEA THE TRANS-EUROPEAN TRASNPORT NETWORK EXECUTIVE AGENCY TRANSLATION CENTRE FOR BODIES OF THE EEAS EUROPEAN EXTERNAL ACTION SERVICE CDT EUROPEAN UNION 13

15 The PSEO members can be split into two main groups: contributing and non-contributing members: Contributing members are officials in active employment, officials in one of the other administrative statuses detailed in article 35 of the Staff Regulations, invalids receiving an invalidity allowance and beneficiaries of an allowance for termination of service; Non-contributing members are the beneficiaries of a retirement, invalidity or survivor's pension and deferred pensioners Real discount rate (RDR) The real discount rate (RDR) is based on the nominal discount rate (NDR) and the expected long-term inflation rate (IR). The following formula is applied: 1+ NDR RDR 1. 1 IR The NDR is determined as the value of the Euro zero-coupon yield with a maturity of 18 years as at , 18 years being the duration of the scheme. The estimated NDR as at was 2.0%. The IR must be an expected inflation rate over the duration of the scheme. IR must be determined prospectively and was based on prospective values as expressed by indexlinked bonds on the European financial markets: the IR was 1.3% By applying the formula above and rounding, it was obtained a RDR equal to 0.7% General Salary Growth (GSG) The GSG used in the framework of liability calculations is set to -0.2% the same as for the 2013 valuation: the -0.2% value arose from the 18-years moving average of the average Specific Indicators (SI) related to the period Individual Salary Progression (ISP) The individual salary progression (ISP) refers to the salary increase due to the career of the EU officials, i.e. promotions and seniority steps. ISP rates have been updated since the 2014 actuarial calculations so to better reflect past observations but also the new stricter rules introduced by the new Staff Regulations in force from 1 January

16 5.5. Life table Early 2013 Eurostat and the ISRP (International Service for Remunerations and Pensions) launched a common project in order to produce an updated life table in The new Life Table was the final outcome of a process of collection of data coming from several international organisations whose populations might be considered as having "homogeneous" features. Those data were smoothed and refined to take into account a dynamic trend for the future mortality on a time horizon of 30 years so to appropriately fits to the most frequent ages of the PSEO members (40 to 58 years). The outcome was the ICSLT 2013 which has been used in the present valuation. Table IX is an extract from this table: Age Dying probability Table VII. ICSLT 2013 Men Life expectancy Women Dying probability Life expectanc y x, y qx ex qy ey Matrimonial coefficients for active officials The probabilities of being married at the time of departure on retirement for men and women remained the same as those used in the previous years, respectively 81% and 49% Assumed retirement age The departure on retirement is supposed to occur at the time when the official benefits from his full rights, taking into account the reduction for early retirement from one side, and the Bonus for late retirement from the other. This assumption has been modelled to take into account the amendments arisen by the SR in force from 1 st January Further to the new legal provisions, assumed retirement ages range from 63 to 65 years, depending on service seniority and age. 15

17 5.8. Turnover Since last year calculation turnover has been embedded so to provide a fairer picture of observed reality for the PSEO. Actual experience has demonstrated that: a growing part of the PSEO members has the "contractual" agent status, and some of those contract agents have a fixed term contract for which the risk not to go beyond the legal maximum cumulated duration of contracts (6 years) is concrete. Two types of turnover have been identified: T1: un-voluntary turnover, whose best example being a member leaving the PSEO further to the end of a fixed-term contract which is not renewed; T2: voluntary turnover, regarding for instance a PSEO member that freely decides to abandon his job, thus losing his status of PSEO member. The table below provides some information on this complex assumption: Table VIII Turnover T1 (end of contract) Contract Types Contract Duration Average T2 (other cause) 2 3 AI1 FP. Contract with indefinite duration BF1 TA. Fixed term contract. Art 8 and Art 2 (a) BF2 TA. Fixed term contract. Art 8 and Art 2 (b) BF3 TA. Fixed term contract. Art 8 and Art 2 (d) BF4 TA. Fixed contract. Art 8 and Art 2(e ) na na BF5 TA. Fixed contract. Art 8 and Art 2 (f) na na BI1 TA. Contract with indefinite duration. Art 8 and Art 2 (a) BI2 TA. Contract with indefinite duration. Art 8 and Art 2 (c) BI5 TA. Indefinite contract. Art 8 and ArArt 2(f) DF1 CA. Fixed term contract. Art 85 and Art 3a DF2 CA. Fixed term contract. Art 88 and Art 3b DI1 CA. Contract with indefinite duration. Art 85 and Art 3a EF1 PA. Fixed term contract. Art Column 2: Contract duration is limited to 35 in indefinite contracts (AI1, BI1, BI2 and DI1). Cells in grey colour: na to indefinite contracts Column 3. Turnover due to reasons other than decease, retirement, invalidity and T1 (end of contract) 5.9. Other assumptions Another actuarial assumptions to be considered, is for instance the loading factor for orphan and divorced spouse pensions, equal to 13% same as in the previous valuation (see summary in paragraph 2.4). 16