FUJIFILM ELECTRONIC IMAGING PENSION PLAN TRUSTEES' ANNUAL REPORT FOR THE YEAR ENDED 5 APRIL 2010
Chairman s Statement On behalf of all the Trustees, I am pleased to present the Annual Report on the FUJIFILM Electronic Imaging Pension Plan (The Plan) for the year ended 5 April 2010. The net assets of The Plan increased by 12.5 million in the twelve months ended 5 April 2010. This is a pleasing result, tracking the market movements and indices that The Plan s investments are targeted to follow, and reversing the downward trend in 2008/9. Enclosed with this report is the 2010 Summary Funding Statement which compares the value of assets held by The Plan at 5 April 2010 against the estimated amount required to pay all the Plan s benefits. The statement shows an estimated funding deficit of 5.2m as at 5 April 2010. This is an improvement on the position at 5 April 2009, mainly due to higher than anticipated investment returns over the twelve month period. I would like to draw to your attention to the recent government announcement signalling a change to the statutory minimum basis (for both revaluation of deferred pensions and increases to pensions in payment) from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI). It is not yet clear exactly how this will impact The Plan and its members. The Trustees await further clarification, and will inform all members when confirmed. I would also like to mention that the Trustees are mindful of the environmental impact resulting from the quantity of paper documentation sent to members, specifically general communications such as this report, and are looking at ways it might be reduced. A website is being developed at www.ffeipensionplan.co.uk and the Trustees anticipate further progress in this area. Finally, the Pensions Act 2004 requires me to inform you that the Trustees have decided with effect from 15 February 2011, to pass a resolution under Section 251(3) of the Act. This preserves the current terms of the Plan regarding payment of surplus assets to employers once all members' benefits have been secured. Dave Arnold September 2010 2
Plan Accounts for the period ended 5 April 2010 Income and Expenditure for 12 months ended 5 April 2010 Net assets of The Plan at 5 April 2009 43,005,478 Income Contributions receivable 260,976 Other Income 400 Total Income 261,376 Expenditure Benefits payable 1,044,663 Payments in respect of leavers 0 Sundry Expenses 834 Investment Manager fees 104,117 Total Expenditure (1,149,614) Returns on Investments Interest on bank deposits 24 Change in market value of investments during the year 13,435,092 Total Return on Investments 13,435,116 Net assets of The Plan at 5 April 2010 55,552,356 The net assets shown include Additional Voluntary Contributions of 1,045,056 which are invested with the Standard Life, Equitable Life and London Life. 3
Investment Report One of the Trustees responsibilities is to ensure the prudent management and investment of The Plan s assets. The day to day responsibility of investing the fund is delegated to a professional investment manager who the Trustees monitor on a regular basis. During the year The Plan s assets, excluding AVCs, were invested by the Trustees with Legal & General Assurance (Pensions Management) Limited. The assets of The Plan are invested in a unitised insurance policy with Legal & General Assurance (Pensions Management) Limited, part of the Legal & General Group, which is one of the largest financial institutions in the United Kingdom. They are invested within a separate equity portfolio and bond portfolio in line with the benchmarks and ranges set out in The Plan s investment strategy see following page. The Trustees maintain a Statement of Investment Principles as required under Section 35 of the Pensions Act 1995. The main purpose of the Statement is to set out details of the investment strategy which is to be followed, the Trustees investment objectives and their attitude to risk. The investment manager is required to comply with this Statement. A copy of the latest Statement is available on request. The portfolio of securities and cash underlying the units issued by Legal & General are held in the name of HSBC Global Investor Services, Citibank and Euroclear who are responsible for the custody of the fund assets. They are regularly audited by external auditors. The value of the units held under the Policy at the beginning and end of the reporting period, on a bid market price basis (previously on a mid market price basis), were as follows: 4
ASSET VALUE AND DISTRIBUTION Investment Value and Distribution Value and Distribution Benchmark Control Sector Fund on 1 April 2009 on 1 April 2010 Distribution Ranges GBP % GBP % % % UK Equity Index 12,350,562 69.4 - - - - Overseas Equities 5,456,782 30.6 - - - - North America Equity Index 1,709,710 9.6 - - - - Europe (ex UK) Equity Index 1,770,580 9.9 - - - - Japan Equity Index 1,101,815 6.1 - - - - Asia Pac exjap Dev Eqty Index 575,749 3.3 - - - - Global Equity 60:40 Index - - 12,801,973 47.8 47.5 43.0 52.0 Global Equity Fixed 60:40 GBP hdg 12,577,392 47.0 47.5 43.0 52.0 Global Emerging Markets Index 298,928 1.7 421,569 1.6 World Emerging Markets Equ Ind - - 953,995 3.6 5.0 4.0 6.0 Total Equities 17,807,344 100.0 26,754,929 100.0 100.0 - Act Cor Bond-All Stock-RPI2025 7,172,720 32.1 8,596,726 32.2 n/a n/a Act Cor Bond-All Stock-RPI2035 7,500,586 33.5 8,812,587 33.0 n/a n/a Act Cor Bond-All Stock-RPI2045 7,695,838 34.4 9,281,547 34.8 n/a n/a Total Bonds 22,369,144 100.0 26,690,860 100.0 100.0 100.0 Cash (charges invoiced) 1,717,355 0.0 918,365 0.0 n/a n/a Total Assets 41,893,843 100.0 54,364,154 100.0 - - The unit prices for these valuations were based on market closing prices on the previous working day. The values shown inclu de any activity that took place on the valuation days. Performance - The time-weighted investment returns on The Plan s assets were as follows: TIME-WEIGHTED RETURNS TO 31 MARCH 2010 Last Twelve Months Last Three Years Last Five Years Investment Sector Fund % % % pa % pa % pa % pa Global Equity 60:40 Index** +11.5 +11.5 n/a n/a n/a n/a Global Equ Fixed 60:40 GBP Hgd** +9.6 +9.6 n/a n/a n/a n/a UK Equity Index** +38.7 +38.0 n/a n/a n/a n/a North American Equity Index** +23.9 +23.6 n/a n/a n/a n/a Europe (ex UK) Equity Index** +34.2 +33.8 n/a n/a n/a n/a Japan Equity Index** +15.4 +15.3 n/a n/a n/a n/a Asia Pac exjap Dev Eqty Index** +46.5 +45.5 n/a n/a n/a n/a Global Emerging Markets Index +72.3 +73.1 +15.8 +14.7 +22.3 +21.6 World Emerging Markets Equ Ind** +14.8 +14.6 n/a n/a n/a n/a Total Equities +50.3 +49.9 +1.3 +1.1 +8.1 +7.9 Act Cor Bond-All Stock RPI2025 * +16.9 +17.5 n/a n/a n/a n/a Act Cor Bond-All Stock RPI2035 * +14.0 +13.2 n/a n/a n/a n/a Act Cor Bond-All Stock RPI2045 * +17.5 +15.5 n/a n/a n/a n/a Total Bonds +16.1 n/a n/a n/a n/a n/a Cash (charges invoices) +0.5 +0.4 +3.4 +3.3 n/a n/a * Since 9 January 2008 ** Since 1 February 2010 5
Membership Statistics Details of the membership of The Plan as at 5 April 2010 are given below: 2010 2009 Members with preserved benefits 361 374 Pensioners 142 129 Total membership 503 503 Pension Increases During the year pensions in excess of the Guaranteed Minimum Pension were increased in line with the Retail Prices Index (up to a maximum of 5% pa), the rate payable for April 2009 was 3.9%. This was in line with the provisions of The Plan Rules. Pensions in respect of the Guaranteed Minimum Pension in payment were partly increased by The Plan and partly increased by the State, in accordance with statutory requirements. No discretionary increases were awarded in the year. Actuarial Statement The actuary to The Plan carried out the last formal actuarial valuation of The Plan as at 5 April 2008. The actuarial valuation indicated that the value of the assets on that date ( 49.7 million) was 3.4 million less than the technical provisions ( 53.1 million). This means that there was an ongoing funding deficit of 3.4 million as at 5 April 2008. Based on the results of this valuation, FUJIFILM Europe BV agreed to pay 29,000 per month from July 2009 until October 2012 (inclusive) and 40,000 per month from November 2012 until June 2017 (inclusive) to fund the deficit of 3.4 million. A copy of the actuarial certification relating to the valuation is available on request. The enclosed Summary Funding Statement indicates how the Plan s funding position has changed since April 2008. Schedule of Contributions Employer contributions were paid in accordance with the Schedule of Contributions, and the Rules of The Plan. These amounted to 29,000 per month starting in July 2009, which the company has been paying as deficit funding contributions. In addition the company pays the expenses of running The Plan. 6
The Trustees The following have served as Trustees during the year: David Arnold (Chairman) Brandon Cox Michael Hicks Graham Webb (Member Nominated) Ernest Harvey (Member Nominated) - appointed 12th May 2009 Advisors to the Scheme Investment Managers - Legal & General Assurance (Pensions Management) Ltd AVC Providers - Standard Life, Equitable Life & London Life Auditors - Ernst & Young LLP Solicitors - SNR Denton UK LLP Actuaries - Lane Clark & Peacock LLP Bankers - HSBC Bank plc Administrators - Lane Clark & Peacock LLP 30 Old Burlington Street London W1S 3NN Other Information Please contact our Administrators Lane Clark & Peacock LLP if you change your address or have any queries about your pension within The Plan. Lane Clark & Peacock LLP (FFEI Pension Plan Administrators) 30 Old Burlington Street London W1S 3NN Copies of the full Report and Accounts, the most recent actuarial valuation and The Plan s Statement of Investment Principles are available and you may also request to see a copy of The Plan's Trust Deed and Rules. If you have any general queries or require further information about The Plan you should contact: The Trustees of the FUJIFILM Electronic Imaging Pension Plan PO Box 63 Knebworth Herts SG3 6WP Email - trustees@ffeipensionplan.co.uk 7