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Recommended Cambridge College Accounts (RCCA): Amendment to Schedule

18 July 2005

The Recommended Cambridge College Accounts were introduced in 2003-04. On the recommendation of the Finance Committee, who have been advised by the Inter-Collegiate Committee on College Accounts, the Council have agreed to propose revisions to the wording in certain sections and tables of the Accounts for clarity and to provide more detail in the section on pensions.

The Council are therefore submitting a Grace (Grace 3, p. 988) to the Regent House for the approval of the amendment to the Schedule to the regulations for College Accounts (Statutes and Ordinances, p. 909) as set out below.

SCHEDULE

D. Statement of Principal Accounting Policies

Basis of preparation

By amending the text of this section so as to read:

The financial statements have been prepared in accordance with the provisions of the Statutes of the College and of the University of Cambridge and applicable Accounting Standards.

In addition, the financial statements [comply] [accord] with the Statement of Recommended Practice for accounting in Further and Higher Education (the SORP) with the exception of the balance sheet which has been presented in the different format set out in the relevant section of the Statutes and Ordinances of the University of Cambridge (RCCA). The provisions of the SORP require Endowments, Deferred Grants, and Revaluation Reserves to be disclosed on the face of the balance sheet whereas RCCA requires that part of this information be disclosed in the notes to the accounts.

Recognition of income

By amending the text of this section so as to read:

Income from permanent capital funds and short-term deposits is credited to the Income and Expenditure Account in the year in which it becomes receivable.

[Income from research grants, contracts, and other services rendered is included to the extent of the completion of the contract or service concerned.]

[Donations and benefactions of an income nature are shown as income in the year in which they become receivable.]

Benefactions and donations accepted on condition that only the income may be spent are credited to the balance sheet as permanent capital funds. The income from a permanent capital fund is shown as income in the year that it is receivable. Income from a permanent capital fund that is not expended in the year in which it is receivable is, at the year-end, transferred from the income and expenditure account to a restricted or unrestricted expendable capital fund, as appropriate. When there is subsequent expenditure of accumulated income from a restricted capital fund, income is credited back to the income and expenditure account from the restricted expendable capital fund to match the expenditure.

Restricted benefactions and donations that are used to fund capital projects are initially credited to a restricted expendable capital fund, and then released over the same estimated useful life that is used to determine the depreciation charge for the capital project.

College fee income is recognized in the period for which it is received and includes all fees chargeable to students or their sponsors. [The costs of any fees waived or written off by the College are included as expenditure.]

Tangible fixed assets

a. Land and buildings

By inserting the following text at the end of this sub-section:

[Land held specifically for development, investment, and subsequent sale is included in current assets at the lower of cost and net realisable value.]

[The cost of additions to operational property shown in the balance sheet includes the cost of land.]

E. [Consolidated] Income and Expenditure Account

EXPENDITURE

By replacing the entries for Contribution under Statute G, II and Net surplus/(deficit) with the following:

 NoteYear to 30 JunePrevious year to 30 June
[Contribution under Statute G, II6xx]
 
 xx
Transfer to/(from)
accumulated income within restricted
expendable capital
 xx
Net surplus/(deficit) £x£x
 
Transfers to/(from) unrestricted and/or designated funds13£x£x
 

I. Notes to the Accounts

(6) CONTRIBUTION UNDER STATUTE G, II

By replacing the entry for Assessment with the following:

Assessment (in accordance with Schedule G):Year to 30 JunePrevious year
   ££
 First band@ x%xx
 Second band@ y%xx
 Third band£xx,xxx @ z%xx

(17) STAFF

By replacing the last three entries in the table and the final seven lines of text with the following:

 Year to 30 JunePrevious year
 College
Fellows
Other
academic
Non-academicTotalTotal
 £££££
Average staff nos. 
Academic ([numbers] [numbers of
stipendiary staff] [full-time equiv.])
xxxxx
Non-academic (full-time equiv.)xxxxx

The number of officers and employees of the College, including the Head of House, who received emoluments in the following ranges was:

 Year to 30 JunePrevious year
£70,000 - £79,999xx
£80,000 - £89,999xx

(continuing in bands of £10,000 until the highest combined stipend and other taxable benefits is reached)*

*or (if relevant)No officer or employee of the College, including the Head of House, received emoluments of over £70,000.

(18) PENSION SCHEMES

By amending the text of this section so as to read:

The College's employees belong to two principal pension schemes, the Universities Superannuation Scheme (USS) and [the Cambridge Colleges Federated Pension Scheme (CCFPS)] [other scheme]. The total pension cost for the period was £xxx,xxx (previous year: £xxx,xxx).

Universities Superannuation Scheme

The Universities Superannuation Scheme is a defined benefit scheme which is externally funded and contracted out of the State Earnings-Related Pension Scheme. The assets of the scheme are held in a separate trustee-administered fund.

It is not possible to identify each institution's share of the underlying assets and liabilities of the scheme and hence contributions to the scheme are accounted for as if it were a defined contribution scheme, the cost recognized within the surplus/deficit for the year in the income and expenditure account being equal to the contributions payable to the scheme for the year.

The latest actuarial valuation of the scheme was at [date]. The assumptions and other data that have the most significant effect on the determination of the contribution levels 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, 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 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 leaving a surplus of assets 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.

The institution contribution rate required for future service benefits alone at the date of the valuation was xx.xx% of salaries but it was agreed that the institution contribution rate would be maintained at xx% of salaries. To fund this reduction of x% for the period of x years from the date of the valuation (the average outstanding working lifetime of the current members of the scheme) required the use of £xx million of the surplus. This left a past service surplus of £xx million (including the Supplementary Section) to be carried forward.

Surpluses or deficits which arise at future valuations may impact on the institution's future contribution commitment. The next formal actuarial valuation is due as at [date] when the above rates will be reviewed. The total pension cost for the College was £xx,xxx. The contribution rate payable by the College was xx% of pensionable salaries.

[Cambridge Colleges Federated Pension Scheme] [Other scheme]

The College also participates in the [Cambridge Colleges Federated Pension Scheme] [other scheme], a defined benefit scheme the assets of which are held in a separate trustee administered fund.

The funding of the scheme is based upon regular triennial actuarial valuations, the last full valuation was carried out as at [date] by a qualified independent actuary. The Financial Reporting Standard 17 (FRS 17) valuation as at [date] uses this valuation as a base and updates the figures using the FRS 17 assumptions. The total pension cost for the College was £xx,xxx. The contribution rate payable by the College was x.xx% of pensionable salaries.

The major assumptions used by the actuary were:

 Year to 30 JunePrevious year
Rate of increase in salariesx%x%
Rate of increase in pensions in deferment 
- Guaranteed minimum pension (GMP)x%x%
- Excess pension over GMP and pension accrued after 5 April 1997x%x%
Rate of increase in pensions in payment 
- GMP accrued up to 5 April 1988x%x%
- GMP accrued between 6 April 1988 and 5 April 1997x%x%
- Excess pension over GMP and pension accrued after 5 April 1997x%x%
Discount ratex%x%
Inflation assumptionx%x%

The assets in the scheme and the expected rate of return were:

 Year to 30 JunePrevious year
 Long term rate
of return
expected
ValueLong term rate
of return
expected
Value
  £ £
Equitiesx%xx%x
Bonds (including cash)x%xx%x
Propertyx%xx%x
 
Total market value of assets x x
 
Present value of scheme liabilities (x) (x)
 
Net pension (liability)/asset x x

The following amounts have been included within the accounts:

Analysis of amounts charged to operating profit

 Year to 30 June
 £
Current service costx
Life assurance premiumx
 
Total operating chargex

Analysis of amount credited to other finance income

 Year to 30 June
 £
Expected return on pension scheme assetsx
Interest on pension scheme liabilities(x)
 
Net returnx

Analysis of the amount recognized in Statement of Total Recognized Gains and Losses (STRGL)

 Year to 30 June
 £
Actual return less expected return on pension scheme assetsx
Experience gains and losses arising on scheme liabilitiesx
Actuarial gain/(loss) recognized in STRGLx

Movement in surplus during the year

 Year to 30 June
 £
Surplus in scheme at beginning of the yearx
Movement in year: 
Current service costs including life assurancex
Contributionsx
Other finance incomex
Actuarial gain/(loss)(x)
Surplus/(deficit) in scheme at end of the year(x)
[Contributions are currently under review after the recent completion of the [year] triennial valuation.]

History of experience gains and losses

Difference between the expected and actual return on scheme assets:
 Year to 30 June
Amount (£000)(x)
 
Percentage of scheme assets(x%)
 
Experience gain/(loss) on scheme liabilities:
   Amount (£000)(x)
 
Percentage of the present value of the scheme liabilities(x%)
Total amount recognized in Statement of Total Recognized Gains and Losses:
   Amount (£000)(x)
 
Percentage of the present value of the scheme liabilities(x%)

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Cambridge University Reporter 20 July 2005
Copyright © 2005 The Chancellor, Masters and Scholars of the University of Cambridge.