5h
Jockey Club Racecourses Limited Notes to the financial statements Year ended 31 December 2021
18.
Pension schemes
Defined benefit pension scheme Until 31 March 2007, all group companies operated a contributory pension scheme providing benefits based on final pensionable pay ("FS Section"), which changed on 1 April 2007 to being based on Career Average Earnings ("CAE Section"). The assets of the scheme are held separately from those of the group. The company operates a defined benefit pension scheme. The Final Salary section of the Scheme closed to accrual with effect from 31 March 2007, although the link to Pensionable Pay was maintained until 31 March 2010. Pension benefits in the Final Salary section of the Scheme are therefore based on the members' Final Pensionable Earnings as at 31 March 2010 (or date of leaving if earlier) and service to 31 March 2007 (or date of leaving if earlier). The Career Average Earnings (CAE) section of the Scheme opened on 1 April 2007 and closed to future accrual with effect from 31 March 2012. Pension benefits in the CAE section of the Scheme are built up each year based on the members' Pensionable Pay in that year. The Trustees are responsible for running the Scheme in accordance with the Scheme's Trust Deed and Rules, which sets out their powers. The Trustees of the Scheme are required to act in the best interests of the beneficiaries of the Scheme. There are two categories of Scheme members: • Deferred members: former active members of the Scheme not yet in receipt of a pension. • Pensioner members: members in receipt of a pension. Following the acquisition of United Racecourses in 1994, the group,created a single contributory pension scheme providing benefits based on final pensionable pay. Accordingly the existing Racecourse Holdings Trust non- contributory scheme and the United Racecourses contributory scheme were closed in respect of future membership. Both schemes were based on final pensionable pay and all members of each scheme were offered the ability to switch into the newly created group pension arrangements. A number of employees elected to remain in each of the closed schemes. As a result the closed schemes continue to be operated in respect of these members. With effect from 1 April 2010, the benefits in the Final Salary Section ceased to be linked to Final Pensionable Salary and, from that date, increases on the excess over the Guaranteed Minimum Pension ("GMP") are in line with increases in the Retail Prices Index (capped at 5% over the period). The GMP is increased in line with National Average Earnings. The defined benefit scheme was closed to new entrants from 1 November 2011 and was closed to all future accruals on 31 March 2012. Futurefundingobligation The Trustees are required to carry out an actuarial valuation every 3 years. The latest actuarial valuation was carried out as at 31 July 2020 which revealed a funding shortfall (technical provisions minus value of assets) of £18.8m. To eliminate this funding shortfall, the Trustees and the Employer agreed that the Employer will pay contributions over the period from 1 August 2020 to 31 December 2029. The Employer has paid £1.6m in contributions between 1 August 2020 and 31 December 2021 and expects to pay contributions between 1 January 2022 and 31 December 2029 as follows: • £125,000 per month from 1 January 2022 to 31 December 2022. • An additional lump sum of £250,000 before 31 December 2023 if the Employer's Group Operating Profit for the year ended 31 December 2022 exceeds £11.5m. • £164,500 per month from 1 January 2023 to 31 December 2029 inclusive, increasing by 3.3% pa each 1 January, with the first increase applying on 1 January 2024.
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