On the recommendation of the Finance Committee, who have been advised by the Inter-Collegiate Committee on College Accounts, the Council has agreed to propose revisions to the wording in certain sections of the Accounts for clarity, to reflect recent legislative changes, and to provide more detail in the section on pensions. The Council is therefore submitting a Grace (Grace 3, p. 764) to the Regent House for the approval of the amendment to certain sections of the Schedule to the regulations for College Accounts (Statutes and Ordinances, p. 941) as set out below.
B. RESPONSIBILITIES OF THE GOVERNING BODY
By amending this section so as to read:
B. STATEMENT OF RESPONSIBILITIES OF THE GOVERNING BODY
The Statement shown here is for illustrative purposes only. Each College will need to consider what statement should be made in the light of its own Statutes, etc.
The Governing Body is responsible for preparing the Annual Report and financial statements in accordance with applicable law and United Kingdom Accounting Standards.
The College's Statutes require the Governing Body to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the College and of the surplus or deficit of the College for that period. In preparing those financial statements the Governing Body is required to:
The Governing Body is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the College and to enable them to ensure that the financial statements comply with the Statutes of the University of Cambridge. They are also responsible for safeguarding the assets of the College and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
[The Governing Body is responsible for the maintenance and integrity of the corporate and financial information included on the College's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.*]
* Where the financial statements are published on the internet
By amending the second heading so as to read:
By amending the text of this section so as to read:
The College participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is externally funded and contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate trustee administered fund. The College is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by FRS 17 'Retirement Benefits', accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the Income and Expenditure Account represents the contributions payable to the scheme in respect of the accounting period.
[A similar note of accounting policy is required in respect of any other scheme in which the College participates, e.g. CCFPS. ]
Capital and reserves
By amending the section so as to read:
| 14 Income/ Expendable capital funds | Permanent capital funds | As at 30 June | As at 30 June previous year | |
£ | £ | £ | £ | |
| Restricted funds held for collegiate purposes* | x | x | x | x |
| Restricted funds held for non-collegiate purposes* | x | x | x | x |
| Unrestricted funds (excluding pension asset/liability) | x | x | x | x |
| Pension reserve | x | x | x | x |
| TOTAL | £x | £x | £x | £x |
* as defined by University Statute G, II
| These accounts were approved by the Governing Body on | and are signed on their behalf by: |
A. OPERATING ACTIVITIES
By inserting a new entry after 'Interest payable' so as to read:
Note | Year to 30 June | Previous year to 30 June | |
£ | £ | ||
| Movement in pension deficit/surplus | x | x
|
By amending the title of this subsection so as to read:
and by replacing in the penultimate line the words 'Net cash inflow/(outflow) from capital transactions' with the words 'Net cash inflow/(outflow) from investing activities'.
(8) FIXED ASSETS
By replacing the last line of the table 'Net book value as at 30 June current year' with the following:
Year to 30 June |
Previous year
|
||||
| TANGIBLE FIXED ASSETS | Freehold land and buildings | Furniture, fittings, and equipment | Rare books, works of art, etc. | Total | Total
|
£ |
£ |
£ |
£ |
||
| NET BOOK VALUE | |||||
| As at 30 June current year | £x | £x | £x | £x | £x |
| As at 30 June previous year | £x | £x | £x | £x | £x |
By replacing the section with the following:
Year to 30 June | Previous year | |
£ | £ | |
| Example | ||
| Due to tradesmen and others | x | x |
| Members of the College | x | x |
| University fees | x | x |
| Contribution to Colleges Fund | x | x |
| Others | x | x
|
£x | £x |
Unrestricted funds:
Undesignated funds
By inserting the following new entry, after 'General capital', so as to read:
|
Year to 30 June | Previous year | |||
|
Note | Income/Expendable capital funds | Permanent capital funds | Total | Total |
£ | £ | £ | £ | |
| Pension reserve | x | - | x | x |
Capital is invested in the following categories of assets:
By inserting the following new entry, after 'Net current Assets', so as to read:
Year to 30 June | Previous year |
|||||||||
Restricted funds | Unrestricted funds | Total | Total | |||||||
Funds for collegiate purposes | Funds for non-collegiate purposes | Designated funds | Undesignated funds |
|||||||
Income/ expendable capital funds | Permanent capital funds | Income/expendable capital funds | Permanent capital funds | Income/expendable capital funds | Permanent capital funds | Income/ expendable capital funds | Permanent capital funds | |||
£ | £ | £ | £ | £ | £ | £ | £ | £ | £ | |
Pension liability (note 19) | x | x | x | x | x | x | x | x | x | x |
Universities Superannuation Scheme
By amending this section so as to read:
The College participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is externally funded and contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate trustee-administered fund. The College is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reliable basis and therefore, as required by FRS 17 'Retirement Benefits', accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period.
The latest actuarial valuation of the scheme was at [date]. The assumptions which have the most significant effect on the result of the valuation are those relating to the rate of return on investments (i.e. the valuation rate of interest) and the rates of increase in salary and pensions. In relation to the past service liabilities, the financial assumptions were derived from market yields prevailing at the valuation date. It was assumed that the valuation rate of interest would be x% per annum, salary increases would be x% per annum (plus an additional allowance for increase in salaries due to age and promotion in line with recent experience), and pensions would increase by x% per annum. In relation to the future service liabilities, it was assumed that the valuation rate of interest would be x% per annum, including an additional investment return assumption of x% per annum, salary increases would be x% per annum (also plus an additional allowance for increase in salaries due to age and promotion), and pensions would increase by x% per annum. The valuation was carried out using the projected unit method.
At the valuation date, the market value of the assets of the scheme was £xx,xxx million and the value of the past service liabilities was £xx,xxx million indicating a deficit of £xxx million. The assets were therefore sufficient to cover x% of the benefits which had accrued to members after allowing for expected future increases in earnings.
Using the Minimum Funding Requirement prescribed assumptions introduced by the Pensions Act 1995, the scheme was x% funded at the valuation date and under the Pension Protection Fund regulations introduced by the Pensions Act 2004 it was x% funded.
The institution contribution rate required for future service benefits alone at the date of the valuation was xx.xx% of pensionable salaries but the trustee company, on the advice of the actuary, decided to maintain the institution contribution rate at xx% of pensionable salaries.
Surpluses or deficits which arise at future valuations may impact on the College's future contribution commitment. An additional factor which could impact the funding level of the scheme is that with effect from 16 March 2006, USS positioned itself as a 'last man standing' scheme so that in the event of the insolvency of any of the participating employers in USS, the amount of any pension funding shortfall (which cannot otherwise be recovered) in respect of that employer will be spread across the remaining participating employers and reflected in the next actuarial valuation of the scheme.
The next formal triennial actuarial valuation is due as at [date]. The contribution rate will be reviewed as part of each valuation.
The total pension cost for the College was £xx,xxx (previous year: £xx,xxx). The contribution rate payable by the College was xx% of pensionable salaries.
By amending the second and third paragraphs of this section so as to read:
The College has elected to change benefits for service from 1 April 2004 for all members by:
The date of the most recent full actuarial was as at [date]. These FRS 17 valuation results use the valuation data updated by an Actuary who is not an employee or officer of the College and/or its subsidiaries.
The contribution made by the College was £xx,xxx (previous year: £xx,xxx), excluding PHI premiums.
and by inserting the following additional sentence after the table giving the major assumptions used by the Actuary:
In addition, standard mortality tables as used in the actuarial valuation for the Trustees were used.
History of experience gains and losses
Experience gains and losses on scheme liabilities
By amending these entries so as to read:
History of experience gains and losses
Year to 30 June |
Previous year(s) |
|
| Difference between the expected and actual return on scheme assets: | ||
| Amount (£000) | xx | xx |
| Percentage of scheme assets | xx% | xx% |
| Experience gains and losses on scheme liabilities: | ||
| Amount (£000) | (xx) | (xx) |
| Percentage of the present value of the scheme liabilities | (xx)% |
(xx)% |
| Total amount recognized in statement of total recognized gains and losses: | ||
| Amount (£000) | xx |
xx |
| Percentage of the present value of the scheme liabilities | xx% |
xx% |