Docusign Envelope ID: 7C50003C-051D-4E0C-907A-F452AD5C4EA2
UNITED TECHNOLOGIES CORPORATION (UK) PENSION SCHEME YEAR ENDED 31 DECEMBER 2023
TRUSTEE’S REPORT
Financial development of the Scheme
The financial statements have been prepared and audited in compliance with regulations made under section 41 (1) and (6) of the Pensions Act 1995.
Significant developments affecting the financial position of the Scheme during the year include:
The overall value increased by £13.5m from £1,568.8m to £1,582.3m comprising;
Return on investments £86.3m.
o
o Reduction from dealing with members £72.8m.
Report on actuarial liabilities
As required by Financial Reporting Standard 102, ‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (FRS 102), the financial statements do not include liabilities in respect of promised retirement benefits. Under section 222 of the Pensions Act 2004, every scheme is subject to the Statutory Funding Objective, which is to have sufficient and appropriate assets to cover its technical provisions, which represent the present value of benefits to which members are entitled based on pensionable service to the valuation date. This is assessed at least every three years using assumptions agreed between the Trustee and the employers and set out in the Statement of Funding Principles, a copy of which is available to members on request.
The latest valuation as at 31 December 2021 was prepared on a market related basis and was signed on 31 January 2023.
A summary of the funding position, in accordance with the Statutory Funding Objective, at the valuation date, was as follows:
Value of assets available to meet technical provisions
£2,535m £2,288m
Value of technical provisions
Past service surplus
£247m
Funding ratio
111%
At 31 December 2023 the Scheme Actuary estimated that the funding position was as follows;
Value of assets available to meet technical provisions
£1,562m £1,459m
Value of technical provisions
Past service surplus
£103m
Funding ratio
107%
Within the actuarial valuation as at 31 December 2021, Asset Backed Funding arrangements were valued at £376.8m. This had reduced to £220.0m as at 31 December 2023 following an assessment of the probability of the Trigger-off mechanism being activated over the period to June 2036 (see also ‘ Investments ’ below). On a basis consistent with that adopted for the latest actuarial valuation, the current funding ratio would be 114%. The actuarial method used in the calculation of the technical provisions is the Projected Unit Method. The value of technical provisions is based on Pensionable Service to the valuation date and assumptions about various factors that will influence the Scheme in the future. The following significant actuarial assumptions have been used in the calculations: Discount interest rate: Determined by taking into account market indicators of the returns available at the date of the valuation and the long-term strategic allocation of assets agreed by the Trustee after taking professional advice.
The return on Government bonds will be taken as a suitable market index yield.
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