LucyGroup-ARA2024_spreads web ready_FINAL

NOTES TO THE ACCOUNTS CONTINUED

BUSINESS OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

24. Pensions continued The Scheme and UURBs arrangement expose the Company to a number of risks:

24. Pensions continued

Bid values as at 31 Dec

• Investment risk. The Scheme holds investments in asset classes, such as equities, which have volatile market values and, while these assets are expected to provide real returns over the long term, the short-term volatility can cause additional funding to be required if deficits emerge. • Interest rate risk. The Scheme’s liabilities are assessed using market yields on high quality corporate bonds to discount the liabilities. As the Scheme holds assets such as equities, the value of the assets and liabilities may not move in the same way. • Inflation risk. A significant proportion of the benefits due under the Scheme are linked to inflation. Although the Scheme’s assets are expected to provide a good hedge against inflation over the long term, movements over the short term could lead to deficits emerging. • Mortality risk. In the event that members live longer than assumed, deficits may emerge in the Scheme. • Member options. Certain benefit options may be exercised by members without requiring the consent of the Trustees or the Company, for example exchanging pension for cash at retirement. In this example, if fewer members than expected exchange pension for cash at retirement then a funding strain will emerge. A discretionary pension increase for members meeting certain criteria was agreed during the period. There were no other amendments, curtailments or settlements during the period. The weighted average duration of the defined benefit obligation is 12 years. Disclosures Figures for disclosure in accounts for the period ending 31 December 2024 under IAS19. Results are shown in pounds, rounded to the nearest £1k.

2024 £000

The current asset split is as follows:

18,703

Equities

1,179

Target Return

19,324 15,090

Corporate bonds Index Linked Gilts

9,330

Gilts Cash

503

Total assets

64,129

At 31 Dec 2024 £000

At 31 Dec 2023 £000

Balance sheet

64,129

Fair value of assets

65,665 (49,295) 16,370 (4,093) 12,277

(45,937) 18,192 (4,548) 13,644

Present value of funded obligations

Surplus in scheme

Deferred tax

Net defined benefit asset

Period to 31 Dec 2024 £000

Period to 31 Dec 2023 £000

Amount recognised in Profit and Loss

Principal actuarial assumptions

At 31 Dec 2023

At 31 Dec 2024

379 501

Current service cost Administration costs Interest on liabilities Interest on assets Past service costs

369 223

5.40% p.a. 3.25% p.a. 2.80% p.a. 3.25% p.a. 3.15% p.a. 2.15% p.a. 2.25% p.a.

Discount rate lnflation (RPI) Inflation (CPI) Salary increases

4.70% p.a. 3.15% p.a. 2.75% p.a. 3.15% p.a. 3.00% p.a. 2.05% p.a. 2.15% p.a.

2,248

2,338

(3,016)

(3,075)

143

– –

Pension increase (RPI max 5% p.a.) Pension increase (RPI max 2.5% p.a.) Pension increase (CPI max 3% p.a.)

–

Settlement and curtailment cost

Total charge/(credit) to Profit and Loss

255

(145)

117% of the S3PA tables with CMI 2023 projections using a long-term improvement rate of 1.25% p.a. The initial addition parameter is 0% p.a. the 2020 and 2021 weight parameters are 0% and the 2022 and 2023 weight parameters are 15%

Post retirement mortality

117% of the S3PA tables with CMI 2022 projections using a long-term improvement rate of 1.25% p.a. The initial addition parameter is 0% p.a., the 2020 and 2021 weight parameters are 0% and the 2022 weight parameter is 25%

Period to 31 Dec 2024 £000

Period to 31 Dec 2023 £000

Remeasurements over the period

1,542

Loss/(gain) on assets in excess of interest

(1,532)

137

Experience losses on liabilities

868

(95)

(Gains) from changes to demographic assumptions (Gains)/losses from changes to financial assumptions

(1,766)

(3,209) (1,625)

1,485

Members are assumed to take 25% of their pension as tax-free cash

Commutation

Members are assumed to take 25% of their pension as tax-free cash

Total remeasurements

(945)

75%

Proportion married

75%

Period to 31 Dec 2024 £000

Period to 31 Dec 2023 £000

1.7% of liabilities for current Scheme members plus £40,000 for historic transfers out

GMP equalisation allowance

1.7% of liabilities for current Scheme members plus £40,000 for historic transfers out

Change in value of the assets

Fair value of assets at start of period

65,665

63,169

21.5 20.3 24.3 22.9

Life expectancy at age 65 of male aged 45 Life expectancy at age 65 of male aged 65 Life expectancy at age 65 of female aged 45 Life expectancy at age 65 of female aged 65

21.6 20.3 24.2 22.8

3,016

Interest on assets

3,075

452

Employer contributions

548

96

Contributions by Scheme participants

95

(3,057)

Benefits paid

(2,531)

(501)

Administration costs

(223)

–

Change due to settlements and curtailments

–

(1,542) 64,129

Return on assets less interest

1,532

Fair value of assets at end of period

65,665

Actual return on assets

1,474

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Lucy Group Ltd Annual Report & Accounts 2024

LUCYGROUP.COM

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