TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED

TAUNTON ASSOCIATION FOR THE
HOMELESS LIMITED
REGISTERED No: 23680R
ANNUAL REPORT
31 MARCH 2013
Bishop Fleming, Chartered Accountants, Bristol
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
CHAIRMAN’S REPORT
Year ended 31 March 2013
I believe 2012 will be seen as a watershed for TAH. For the first time we had to competitively tender
for the provision of our services and, thanks to the exemplary work undertaken by John Shipley, we
were successful in convincing Somerset County Council that Taunton Association for the Homeless
was not only a fit organisation for the purpose of housing and supporting the single homeless in
Taunton Deane and Sedgemoor but that we were also fit to provide the same services in West
Somerset, to extend our services to people living in their own homes but at risk of homelessness and
to provide all the housing and support required by 16 to 24 year olds in Taunton Deane.
The Board has already expressed its gratitude to John Shipley and Sarah Davies for their hard work
in this difficult year and the importance of the support of the Board to the senior management team
should not be underplayed. We are a small organisation with a dedicated team of workers led by a
dedicated management. The Board is proud to support everyone who works at TAH and I,
particularly, am confident that the decision taken by Somerset County Council to award us the
contracts will prove to be the launch pad for further success. This will not come without a lot of hard
work and, in many respects, a change of approach to how we do our work.
Already much is changing. Staff from other organisations, whose contracts we have taken over, will
join us. New properties in Taunton, Dulverton and Watchet will become our responsibility stretching
our limited manpower resources. John, in particular, will need the full support of his team as well as
the Board being mindful of any extra manpower needed for successful outcomes.
Of course, we have been working towards this new dawn for the last year or so. The new extended
management team has bedded down well and we have welcomed Lesley Farley, responsible for
fundraising, as an important addition. We will be looking increasingly to donations as a means of
effectively delivering help to those who need it in the future.
Our values remain the same but now encompass the banner of Ending Rough Sleeping in the SouthWest and we are committed to providing the support our clients need so that they can reintegrate with
their family and/or society and prepare themselves for the jobs market. None of this is accomplished
without a huge commitment from our staff who work with patience and diligence to win the trust of
some of society’s most disadvantaged people.
Our staff have consistently shown their loyalty to TAH and commitment to our cause. In recognition
of this the Board was pleased to award them a one off loyalty bonus.
Change does not come easily to either individuals or organisations. TAH will be changing. This
means that all who work here will have to change. Some may need to change a lot, many will not, but
all will notice some change in the coming months. We have often talked at Board meetings about
expanding the role of TAH and what this would mean; we are now about to find out.
This has been a good year for TAH and 2013 should prove to be even better.
Dr David Edmondson.
1
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
DIRECTOR’S REPORT
Year ended 31 March 2013
2012/13 began with much trepidation as we knew we would have to compete against many other skilled and
efficient organisations in order to retain our contracts with Somerset County Council. For some of our
competitors, this was an important but not vital process, as working with homeless people in Somerset was
either a new venture for them or was only a part of what they do. For TAH, it is all that we do – it is the reason
we exist. That focused the mind somewhat.
Thankfully, due to the hard work of many people, the vision that we had for future services, the successful
partnership working we have demonstrated in recent years and our positive and growing reputation, we were
successful in the tender process. We secured both our existing business and some new areas of work which
will be a challenge for some time to come. We look forward to the challenge for that is what we thrive on –
identifying obstacles to success, developing new ways of working and achieving success, together.
Every day, our clients face challenges far greater than most of us could imagine.
Every day, our committed staff team do their utmost to help clients overcome those challenges.
Every day, we make progress.
Every day, new challenges arise and we recommit ourselves to our clients and our stakeholders.
We will get there because we have no choice – that is what we do, that is why our staff work for us, that is
why our volunteers commit their valuable time, that is why we are here.
With the continuing recession, welfare benefit changes and increasing pressure on families, the demand for
our services sadly continues to grow. We work increasingly closely with Taunton Deane Borough Council,
Sedgemoor District Council and Somerset County Council and look forward to developing equally positive
relationships with West Somerset District Council in the coming months. We have also developed strong
relationships with partner agencies such as Bridgwater YMCA, Knightstone Housing and Mendip YMCA,
retaining our independence but working with others to ensure that joined-up services are provided across the
county.
Our statutory, grant and rental income (which makes up the vast majority of our funding) is, by its very nature,
restricted in that it can only be used for the purpose intended i.e. to fund those core services it is intended to
support. We are therefore heavily dependent on the generosity of organisations, companies and individuals to
fund those extra things many of us take for granted. This might be, for example, making improvements to our
aging properties, buying a young person the equipment they need to start a college course, paying the travel
costs of a client who needs to travel to a family funeral or helping a rough sleeper to set up their first home.
Without donations or grants to support existing services and develop new ones, our work would be even
harder.
In 2012/13, we worked with over 600 clients and around 66% of those leaving our accommodation moved on
positively – we should all be proud of that achievement. Our occupancy rate remains high (98.7%) and we
continue to operate effectively and efficiently. We have performed remarkably well during a very testing time.
There remains a lot to do and we are proud to do it
John Shipley
2
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
Statement of the Board of Management Responsibilities
We are required by law to prepare accounts for each financial year which give a true and fair view of the state of affairs
of the Association, and of the surplus or deficit of the Association for that period.
In preparing these accounts we are required to:
-
select suitable accounting policies and apply them consistently;
-
make reasonable and prudent judgements and estimates;
-
prepare the accounts on a going concern basis unless it is inappropriate to presume that the association will
continue to operate.
The board of management are responsible for keeping proper accounting records which disclose with reasonable accuracy
at any time the financial position of the Association and to enable them to ensure that the financial statements comply
with the Industrial and Provident Societies Acts 1965 to 2002 and the Friendly and Industrial and Provident Societies Act
1968.
We are also responsible for safeguarding the assets of the association and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
On behalf of the Board of Management
P Qureshi
Chairman of the Audit Committee
Date …………………..
3
Independent Auditor’s Report to the Members of Taunton Association For The Homeless Limited
We have audited the financial statements of Taunton Association For The Homeless Limited for the year ended 31 March
2013 which comprise the Consolidated Income and Expenditure Account, the Balance Sheet, the Cash Flow Statement
and the related notes. These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the society’s members, as a body, in accordance with Section 9 of the Friendly and
Industrial and Provident Societies Act 1968. Our audit work has been undertaken so that we might state to the society’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the society and the society’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of the Committee of Management and Auditors
The Committee of Management’s responsibilities for preparing the financial statements in accordance with applicable law
and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the
Statement of Committee of Management’s Responsibilities.
Our responsibility, as independent auditor, is to audit the financial statements in accordance with relevant legal and
regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with UK Generally Accepted Accounting Practice and the Industrial and Provident Societies Acts 1965 to
2002. We also report to you if, in our opinion, a satisfactory system of control over transactions has not been maintained
or if proper books of account have not been kept by the society.
In addition we state if we have not obtained all the information and explanations necessary for the purposes of our audit
or if the society’s balance sheet and its revenue account are not in agreement with the books of account.
We read other information contained in the Report of the Committee of Management and consider whether it is consistent
with the audited financial statements. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other
information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in
the financial statements. It also includes an assessment of the significant estimates and judgements made by the
Committee of Management in the preparation of the financial statements and of whether the accounting policies are
appropriate to the society's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated
the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of the society's affairs at 31 March 2013 and
of its income and expenditure for the year then ended and have been properly prepared in accordance with UK Generally
Accepted Accounting Practice and with the Industrial and Provident Societies Acts 1965 to 2002.
Bishop Fleming
Chartered Accountants
Statutory Auditors
16 Queen Square
Bristol
BS1 4NT
Date:
4
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT
year ended 31 March 2013
Note
£
Income
Rent Receivable
Assessment Centre Rental Income
Grants Receivable
Donations
Property Donation from Somerset CC
Other Income
Café Income
Hire of Meeting Room/Training Centre
4
2013
£
757,086
16,005
891,765
37,994
35,243
5,412
5
664,272
887,322
24,290
189,999
30,759
22,409
4,389
1,743,505
Direct Expenditure
Food
Social Events for Residents
Donated Funds Expended
Salaries
Property Costs
57,298
1,787
8,164
1,024,895
369,958
8
6
Gross Operating Surplus
Administration Expenses
Depreciation
7
Operating Surplus
Interest Received
Net Surplus
Transfers to Sinking Fund
Transfers from/(to) Fixed Asset Reserve
17
18
Net surplus/(Loss) Transferred to General Reserve
2012
£
£
1,823,440
66,565
2,115
4,202
994,213
270,618
1,462,102
1,337,713
281,403
485,727
(91,569)
(96,071)
(84,941)
(94,796)
93,763
305,990
5,013
2,140
98,776
308,130
(45,175)
78,343
______
(45,310)
(253,187)
______
131,944
9,633
Continuing Operations
None of the Association’s material activities were acquired or discontinued during the current or previous year.
Total Recognised Gains and Losses
The Association has no recognised gains or losses other than the surplus for the current year and the surplus for the
previous year.
5
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
CONSOLIDATED AND ASSOCIATION BALANCE SHEETS
as at 31 March 2013
Group and Association
Note
Fixed Assets
Tangible Assets
Current Assets
Stock
Debtors
Cash at Bank and in Hand
Creditors: amounts falling
due within one year
9
2013
£
2012
£
1,414,097
1,492,440
3,052
74,134
721,384
798,570
4,027
66,762
551,084
621,873
10
11
(204,502)
Net Current Assets
Total Assets less Current Liabilities
Creditors: amounts falling
due after one year
594,068
423,969
2,008,165
1,916,409
(119,965)
(126,990)
1,888,200
1,789,419
12
Net Assets
(197,904)
Called up Share Capital
Fixed Asset Reserve
Maintenance Sinking Fund
General Reserve
15
18
17
16
43
1,414,097
158,174
315,886
38
1,492,440
112,999
183,942
Association Funds
19
1,888,200
1,789,419
The Association’s subsidiary company had no assets or liabilities as at 31 March 2013 or 2012 and so separate balance
sheets are not required.
The accounts were approved by the Board of Management on
………………………………………….
D Edmondson
(Chairman)
and signed on its behalf by:-
……………………………………..
P Qureshi
(Chair of the Audit Committee)
………………………………………
E Bishop
(Secretary)
6
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
1
Principal Accounting Policies
(a)
Basis of Accounting
The accounts have been prepared in accordance with applicable accounting standards under the historical
cost accounting convention.
(b)
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the association and its
subsidiary TAH Enterprises Limited.
(c)
Rental Income
Rental income is accounted for on a receivable basis and provision has been made in these accounts for
rents owing at 31 March 2013 where there is not a reasonable expectation of recovery.
For properties where the association acts as managing agents the rent collected by the association is
included in rental income. The amount payable to the property owner is included in expenditure. This
treatment fairly reflects the level of activity undertaken by the association and is consistent with other
properties owned by the association.
(d)
Grants
Government grants on capital expenditure are credited to a deferral account and are released to revenue
over the expected useful life of the relevant asset by equal annual instalments.
(e)
Depreciation
Depreciation is provided on tangible fixed assets in equal instalments in order to write off the cost over
their anticipated useful lives. The anticipated useful lives are as follows:
Freehold Property
- 25 years
Improvements to Leasehold Property
- over the period of the lease, or 25 years where the lease is for
an indefinite term.
Fixtures and Fittings
- 3 years
Office Equipment
- 3 years
Motor Vehicles
- 5 years
Fixtures and Fittings comprise the initial cost of fitting out new premises only. Fixtures and Fittings within
the Association’s Hostels and Satellite Houses are subject to considerable wear and tear and are constantly
being replaced and renewed. Expenditure on Fixtures and Fittings which is therefore of a replacement
nature is written off to revenue in the year in which the cost is incurred.
(f)
Stock
Stock of foodstuffs and consumables is valued at the lower of cost and net realisable value.
(g)
Operating Leases
Rentals paid under operating leases are charged to the profit and loss account as incurred.
7
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
1 Principal Accounting Policies (Continued)
(h)
Pensions
The Association participates in the Social Housing defined benefit final salary pension scheme.
Contributions are based on pension costs across the various participating Associations taken as a whole.
The assets of the scheme are invested and managed independently of the finances of the Association.
Pension costs are assessed in accordance with the advice of an independent qualified actuary. Costs
include the regular cost of providing benefits which it is intended should remain at a substantially level
percentage of current future earnings of the employees concerned.
Exemption from full disclosure of pension assets and liabilities has been taken in accordance with FRS17.
The pension scheme is a multi-employer defined benefit scheme whose assets and liabilities cannot be
separately identifiable from those of other members of the scheme.
Contributions paid during the year are charged to the income and expenditure account.
(i) Reserves
Within Taunton Association for the Homeless’s (TAH) accounts there are balances on different reserve
accounts. There is a balance of cash held in the bank account, which is kept as working capital for any
unexpected expenditure. These reserves will be reviewed annually.
Fixed Asset Reserve
This reserve agrees to the net book value of the fixed assets in the accounts. This clarifies how much of the
association’s reserves are tied up in fixed assets and can only be converted into cash if they are sold.
Maintenance Sinking Fund
The Sinking Fund is based on an assessment of the future expenditure that is likely to be incurred in
maintaining the buildings and rooms in their current state and condition e.g. Roof repair/replacement,
external decoration.
General Reserve
This reserve is where any surpluses/losses get transferred to at the end of each financial year. This reserve
also is to cover any running costs should the association have to cease trading.
2
Operating Surplus
2013
2012
96,071
7,500
28,210
94,796
6,844
1,500
28,497
The operating surplus is stated after charging
Depreciation owned assets
Auditors remuneration - audit
- non audit
Operating lease payments
3
Taxation
As an exempt charity, Taunton Association for the Homeless Limited is exempt from income tax under section
505 Income and Corporation Taxes Act 1988. No liability to corporation tax arose in 2013 nor in 2012
8
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
4
Rents Receivable
Bed
Nights
5
2012
£
46,242
(580)
799,540
(9,948)
45,631
(804)
701,992
(14,436)
Actual Occupancy
45,662
789,592
44,827
687,556
Less Bad Debts written off
Less Bad Debts provided for
(11,286)
(21,220)
(8,026)
(15,258)
Actual Rents Receivable
757,086
664,272
2013
£
2012
£
812,352
29,213
50,200
831,139
56,183
891,765
887,322
2013
£
2012
£
2,522
140,878
66,804
121,026
20,550
7,130
9,888
1,160
2,850
102,101
59,511
66,381
22,346
7,130
8,340
1,959
369,958
270,618
2013
£
2012
£
6,023
10,826
7,785
11,396
4,164
3,851
661
16,045
7,500
16,281
410
6,334
293
5,790
7,666
5,458
2,253
7,143
4,555
636
16,561
8,344
21,503
97
4,935
-
91,569
84,941
Grants Receivable
Statutory
Property Costs
Motor and Travelling
Rent, Rates and Insurance
Heat and Light
Repairs and Renewals
Laundry and Cleaning
TV Licences
Telephones
Sundry Expenses
7
Bed
Nights
Maximum Occupancy
Less Unoccupied Rooms
Supported Housing Grant
Homeless Transition Fund
Other Grants
6
2013
£
Administrative Expenses
Office, Rent, Rates and Insurance
Stationery and Photocopying
Telephone and Postage
Promotional Expenses
Office, Heat and Light
Subscriptions
Meetings Expenses
Legal and Professional
Auditors Remuneration
Computer Costs
Sundries
Mortgage Interest
(Profit)/Loss on Sale of Fixed Asset
9
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
8
Employee Costs
The average number of employees of the Association was:
Costs in respect of those employees were as follows:
Wages and Salaries
Social Security Costs
Pension Costs
Volunteer expenses
Night Security Costs
9
2013
No.
38
2012
No.
33
£
£
860,288
64,277
38,118
805
61,407
839,504
59,743
35,156
59,810
1,024,895
994,213
Tangible Assets- Group and Association
Freehold
Property
£
Improvements to
Leasehold
Property
£
Fixtures
and
Fittings
£
Equipment
£
Motor
Vehicles
£
Total
£
Cost
As at 1 April 2012
Additions
Disposals
As at 31 March 2013
1,762,806
0
1,762,806
142,868
0
142,868
34,631
714
(1,634)
33,711
60,269
17,339
77,608
10,516
10,516
2,011,089
18,053
(1,634)
2,027,508
Depreciation
As at 1 April 2012
Charge for year
Disposals
As at 31 March 2013
342,630
70,512
413,142
103,897
3,208
107,105
26,097
6,288
(1,306)
31,079
42,869
13,959
56,828
3,156
2,104
5,260
518,649
96,071
(1,306)
613,414
As at 31 March 2013
1,349,664
35,763
2,632
20,780
5,256
1,414,094
As at 31 March 2012
1,420,176
38,971
8,534
17,400
7,360
1,492,440
Net book value
Somerset County Council (SCC) holds a charge over the freehold property at 44, William Street, Taunton. In the
event that the Association ceases to use this property in accordance with its current objects before July 2026, it
could be required to pay the sum of £190,000 to SCC. As this event is considered to be unlikely no provision has
been made in the accounts.
10
Debtors- Group and Association
2013
£
Rents Receivable
Income Tax Recoverable
Other Debtors
Prepayments
10
2012
£
62,072
930
186
10,946
51,993
820
1,663
12,286
74,134
66,762
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
11
Creditors-amounts falling due within one year- Group and Association
Trade Creditors
Taxation and Social Security
Other Creditors and Accruals
Lloyds Mortgage
12
Creditors – amounts falling due after one year- Group and Association
Rent Deposit Scheme
Lloyds mortgage
2013
£
2012
£
57,323
18,227
124,337
4,615
34,469
18,770
140,343
4,322
204,502
197,904
2013
£
2012
£
30,460
89,505
32,870
94,120
119,965
126,990
The mortgage is secured on the property at 90-91 East Reach, Taunton and is repayable by instalments over a 15
year term ending in June 2026.
13
Obligations under Leasing Agreements
The following payments are committed to be paid within one year:
Operating Leases
Association
2013
£
Plant and Machinery
Expiring within one year
Expiring in 2 – 5 years
2012
£
680
2,581
3,550
3,261
3,550
26,500
26,500
26,500
26,500
Land and Buildings
Expiring within one year
11
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
14
Pension Commitments
Defined Benefit Contributions
2013
£
2012
£
38,118
35,156
Taunton Association for the Homeless Limited participates in the Social Housing Pension Scheme (SHPS). The
Scheme is funded and is contracted-out of the state scheme.
SHPS is a multi-employer defined benefit scheme. Employer participation in the Scheme is subject to adherence
with the employer responsibilities and obligations as set out in the “SHPS Housing Policies and Rules Employer
Guide”.
The Scheme operated a single benefit structure, final salary with a 1/60th accrual rate until 31 March 2007. From
April 2007 there are three benefit structures available, namely:
-
Final salary with a 1/60th accrual rate
Final salary with a 1/70th accrual rate
Career average revalued earnings (CARE) with a 1/60th accrual rate
From April 2010 a further two defined benefit structures have been available, namely:
Final salary with 1/80th accrual rate
Career average revalued earnings (CARE) with a 1/80th accrual rate
A defined contribution benefit structure was made available from 1 October 2010.
An employer can elect to operate different benefit structures for their active members (as at the first day of April in
any given year) and their new entrants. An employer can only operate one open benefit structure at any one time.
An open benefit structure is one which new entrants are able to join.
Taunton Association for the Homeless Limited has elected to operate the final salary with a 1/60th accrual rate
benefit structure for active members as at 31 March 2007, and career average revalued earnings with a 1/60th rate
benefit structure for new entrants from 1 April 2007. This does not reflect any benefit structure changes made
from April 2010.
The Trustee commissions an actuarial valuation of the Scheme every 3 years. The main purpose of the valuation
is to determine the financial position of the Scheme in order to determine the level of future contributions required,
in respect of each benefit structure, so that the Scheme can meet its pension obligations as they fall due. From
April 2007 the split of the total contribution rate between member and employer is set at individual employer
level, subject to the employer paying no less than 50% of the total contribution rate. From 1 April 2010 the
requirement for employers to pay at least 50% of the total contribution rate no longer applies.
The actuarial valuation assesses whether the Scheme’s assets at the valuation date are likely to be sufficient to pay
the pension benefits accrued by members as at the valuation date. Asset values are calculated by reference to
market levels. Accrued pension benefits are valued by discounting expected future benefit payments using a
discount rate calculated by reference to the expected future investment returns.
During the accounting period Taunton Association for the Homeless Limited paid contributions at the rate of
8.34% to 10%. Member contributions varied between 5.96% and 8.20% depending on their age.
As at the balance sheet date there were 7 active members of the Scheme employed by Taunton Association for the
Homeless Limited. The annual Pensionable Payroll for these employees was £182,581. Taunton Association for
the Homeless Limited continues to offer membership of the Scheme to its employees.
It is not possible in the normal course of events to identify on a consistent and reasonable basis the share of
underlying assets and liabilities belonging to individual participating employers. This is because the scheme is a
multi employer scheme where the scheme assets are co-mingled for investment purposes, and benefits are paid
from total scheme assets. Accordingly, due to the nature of the Plan, the accounting charge for the period under
FRS 17 represents the employer contribution payable.
12
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
14
Pension Commitments (Continued)
The last formal valuation of the Scheme was performed as at 30 September 2011 by a professionally qualified
actuary using the Projected Unit Method. The market value of the Scheme’s assets at the valuation date was
£2,062 million. The valuation revealed a shortfall of assets compared with the value of liabilities of £1,035
million, equivalent to a past service funding level of 67.0%.
The Scheme Actuary has prepared an Actuarial Report that provides an approximate update on the funding
position of the Scheme as at 30 September 2012. Such a report is required by legislation for years in which a full
actuarial valuation is not carried out. The market value of the Scheme’s assets at the date of the Actuarial Report
was £2,327 million. The Actuarial Report revealed a shortfall of assets compared with the value of liabilities of
£1,241 million, equivalent to a past service funding level of 65%.
The financial assumptions underlying the valuation as at 30 September 2011 were as follows:
%pa
Valuation Discount Rates
Pre retirement
Non Pensioner Post retirement
Pensioner Post retirement
Pensionable earnings growth
Price Inflation (RPI)
Pension Increases
Pre 88 GMP
Post 88 GMP
Excess over GMP
7.0
4.2
4.2
2.5 per annum for 3 years, then 4.4
2.9
0.0
2.0
2.4
Expenses for death in service insurance, administration and Pension Protection Fund (PPF) levy are included in
the contribution rate.
The valuation was carried out using the following demographic assumptions
Mortality pre retirement - 41% SAPS S1 Male / Female All Pensioners (amounts), Year of Birth, CMI_2009
projections with long term improvement rates of 1.5% p.a. for Males and 1.25% p.a. for Females.
Mortality post retirement – 97% SAPS S1 Male / Female All Pensioners (amounts), Year of Birth, CMI_2009
projections with long term improvement rates of 1.5% p.a. for Males and 1.25% p.a. for Females.
The long-term joint contribution rates required from April 2013 required from employers and members to meet the
cost of future benefit accrual were assessed at:
Long-term joint contribution rate
(% of pensionable salaries)
Benefit structure
Final salary with a 1/60th accrual rate
Final salary with a 1/70th accrual rate
Career average revalued earnings with a 1/60th accrual rate
Final salary with a 1/80th accrual rate
Career average revalued earnings with a 1/80th accrual rate
Career average revalued earnings with a 1/120th accrual rate
19.4
16.9
18.1
14.8
14.0
9.7
If an actuarial valuation reveals a shortfall of assets compared to liabilities the Trustee must prepare a recovery
plan setting out the steps to be taken to make up the shortfall.
13
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
14
Pension Commitments (Continued)
Following consideration of the results of the actuarial valuation it was agreed that the shortfall of £1,035 million
would be dealt with by the payment of deficit contributions as shown below:
From 1 April 2013 to 30 September 2020 - A cash amount(*) equivalent to 7.5% of Members’ Earnings per
annum (payable monthly and increasing by 4.7% per annum each 1 April)
From 1 October 2020 to 30 September 2023 - A cash amount(*) equivalent to 3.1% of Members’ Earnings per
annum (payable monthly and increasing by 4.7% per annum each 1 April)
From 1 April 2013 to 30 September 2026 - £30,640,000 per annum (payable monthly and increasing by 3% per
annum each 1 April; first increase on 1 April 2014)
(*) The contributions of 7.5% will be expressed in nominal pound terms (for each Employer), increasing each year
in line with the Earnings growth assumption used in the 30 September 2008 valuation (i.e. 4.7% per annum). The
contributions of 3.1% will be calculated by proportioning the nominal pound payment at the time of the change.
Earnings at 30 September 2008 (for each Employer) will be used as the reference point for calculating these
contributions.
These deficit contributions are in addition to the long-term joint contribution rates as set out in paragraph 14 above
The Scheme Actuary will provide an approximate update on the funding position of the Scheme as at 30
September 2013. Such a report is required by legislation for years in which a full actuarial valuation is not carried
out. The results of this approximate update will be available in Spring 2014 and will be included in next year’s
Disclosure Note.
Employers that participate in the Scheme on a non-contributory basis pay a joint contribution rate (i.e. a combined
employer and employee rate).
Employers that have closed the defined benefit section of the Scheme to new entrants are required to pay an
additional employer contribution loading of 2.5% to reflect the higher costs of a closed arrangement.
A small number of employers are required to contribute at a different rate to reflect the amortisation of a surplus or
deficit on the transfer of assets and past service liabilities from another pension scheme into the SHPS Scheme.
New employers that do not transfer any past service liabilities to the Scheme pay contributions at the ongoing
future service contribution rate. This rate is reviewed at each valuation and new employers joining the Scheme
between valuations up until 1 April 2010 do not contribute towards the deficit until two valuations have been
completed after their date of joining. New employers joining the Scheme after 1 April 2010 will be liable for past
service deficit contributions from the valuation following joining. Contribution rates are changed on the 1 April
that falls 18 months after the valuation date.
A copy of the recovery plan, setting out the level of deficit contributions payable and the period for which they
will be payable, must be sent to the Pensions Regulator. The Regulator has the power under Part 3 of the Pensions
Act 2004 to issue scheme funding directions where it believes that the actuarial valuation assumptions and/or
recover plan are inappropriate. For example the Regulator could require that the Trustee strengthens the actuarial
assumptions (which should increase the scheme liabilities and hence impact on the recovery plan) or impose a
schedule of contributions on the Scheme (which would effectively amend the terms of the recovery plan). A
response regarding the 30 September 2011 valuation is awaited.
14
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
14
Pension Commitments (Continued)
Contingent liability
As a result of pension scheme legislation there is a potential debt on the employer that could be levied by the
Trustee of the Scheme. The debt is due in the event of the employer ceasing to participate in the Scheme or the
Scheme winding up.
The debt for the Scheme as a whole is calculated by comparing the liabilities for the Scheme (calculated on a buyout basis, ie the cost of securing benefits by purchasing annuity policies from an insurer, plus an allowance for
expenses) with the assets of the Scheme. If the liabilities exceed assets there is a buy-out debt.
The leaving employer’s share of the buy-out debt is the proportion of the Scheme’s liability attributable to
employment with the leaving employer compared to the total amount of the Scheme’s liabilities (relating to
employment with all the currently participating employers). The leaving employer’s debt therefore includes a
share of any ‘orphan’ liabilities in respect of previously participating employers). The amount of the debt
therefore depends on many factors including total Scheme liabilities, Scheme investment performance, the
liabilities in respect of current and former employees of the employer, financial conditions at the time of the
cessation event and the insurance buy-out market. The amounts of debt can therefore be volatile over time.
Taunton Association for the Homeless Limited has been notified by the Pensions Trust of the estimated employer
debt on withdrawal from the Social Housing Pension Scheme based on the financial position of the Scheme as at
30 September 2012. As of this date the estimated employer debt for Taunton Association for the Homeless
Limited was £794,380 (2012 - £734,162).
15
16
Share Capital - Association
2013
£
2012
£
Issued and Fully Paid Share of £1 each
At 1 April 2012
Deceased
Resigned
Appointed
38
5
38
At 31 March 2013
43
38
General Reserve
2013
£
2012
£
-
As at 1 April 2012
Surplus for the Year
Transfer from Fixed Asset Reserve
Transfer to Fixed Asset Reserve
Transfer to Maintenance Sinking Fund
Transferred from Maintenance Fund
183,942
102,035
78,343
(48,434)
-
174,309
308,130
(253,187)
(45,310)
-
As at 31 March 2013
315,886
183,942
15
TAUNTON ASSOCIATION FOR THE HOMELESS LIMITED
NOTES TO THE ACCOUNTS
year ended 31 March 2013
17
18
19
20
Maintenance Sinking Fund
2013
£
2012
£
As at 1 April 2012
Transferred from/(to) General Reserve
Expenditure in the Year
112,999
48,434
(3,259)
67,689
45,310
-
As at 31 March 2013
158,174
112,999
Fixed Asset Reserve
2013
£
2012
£
As at 1 April 2012
Expenditure in the year
Transferred in the year
Transferred from reserve
1,492,440
(78,343)
-
1,239,258
253,187
-
As at 31 March 2013
1,414,097
1,492,440
2013
£
2012
£
Opening Association’s Funds
Share Capital
Surplus for the Financial Year
Expenditure
1,789,419
5
98,776
1,481,289
308,130
Closing Association’s Funds
1,888,200
1,789,419
Reconciliation of Movements in Group Funds
Controlling Interest
The Association is not controlled by any one party.
16