Docusign Envelope ID: 7C50003C-051D-4E0C-907A-F452AD5C4EA2
UNITED TECHNOLOGIES CORPORATION (UK) PENSION SCHEME YEAR ENDED 31 DECEMBER 2023
TRUSTEE’S REPORT
As a proportion of the Scheme’s funds are invested in assets such as equities which would be expected to outperform Government bonds over the long term, an allowance will be made for this in the discount rate. The allowance is determined by the Trustee based on information provided by its professional advisers. The initial discount rate is the Bank of England gilt curve plus decreasing margin of 1.55% pa decreasing linearly to 0.70% pa in 2036 and thereafter remaining at 0.70% pa. Future Retail Price inflation: By looking at the cost of investing in Government bonds with payments linked to inflation compared to the cost of investing in Government bonds not linked to inflation, it is possible to arrive at a figure for the average market view of future price inflation. This will then be compared to the latest Treasury targets for inflation in the UK, when deriving the assumption to use. A deduction may be made for the inflation risk premium implicit within Government bonds. Future Consumer Price Inflation: The Consumer Price Index (CPI) assumption will be based on the Retail Price Index (RPI) assumption less a deduction of 1.0% until 2030 to reflect the expected difference between RPI and CPI inflation over that period. Pension increases: Derived from the term dependent rates for future retail prices and consumer price inflation allowing for the caps and floors on pension increases according to the provisions in the Scheme’s rules. Mortality: The rates of mortality assumed will reflect the latest reports published by the Continuous Mortality Investigation Bureau most relevant to the membership of the Scheme, with allowance for expected future improvements in longevity. This assumption may be adjusted on the advice of the Scheme Actuary or in the light of evidence relating to the actual mortality experience of the Scheme, the industry in which the members work, or the distribution of pension payment amounts.
For the period pre and post retirement, standard tables S3PMA with a scaling factor of 95% for males and S3PFA with a scaling factor of 100% for females was used.
RTX Corporation and the participating employers are required to pay or procure the payment of contributions to the Scheme, or to make such other payments as are from time to time required, by the most recent Schedule of Contributions and Payments Deed as amended from time to time. As shown above the actuarial valuation at 31 December 2021 revealed a funding surplus of £247m. Consequently, no deficit reducing contributions were payable for the year to 31 December 2023 and none are currently payable. Under the Payments Deed 2023 which became effective from 30 August 2023, unless the Scheme funding level at 31 August (as estimated by the Scheme Actuary) is equal to or more than 110%, the Employers are required to pay contributions towards the Scheme expenses. In the year to 31 December 2023 this resulted in no contribution being receivable because the funding level was greater than 110%. Employer contributions are also required under the Payments Deed 2023 to cover the cost of the risk and scheme-based Pension Protection Fund Levy (‘PPF Levy’) payments where the Scheme funding level at 31 August (as estimated by the Scheme Actuary) is below 110%. Where the funding level is equal to or more than 110%, the Employers are required to pay contributions equal to the excess over £600,000 of the cost of the PPF Levy. In the year ended 31 December 2023 no contributions were payable because the funding level was greater than 110% and the PPF Levy costs were below £600,000.
Contributions in respect of benefit augmentations requested by an employer and approved by the Trustee remain payable. No such contributions were requested in 2023.
The next actuarial valuation is due as at 31 December 2024.
8
Made with FlippingBook Publishing Software