Northern Ireland Water Annual Report & Accounts 2018/19

NI Water Annual Report and Accounts 2018/19 NI Water Annual Report and Accounts 2018/19 160 161 Statutory Accounts Statutory Accounts G3. Employee benefits continued Amounts recognised in the statement of financial position Total year to 31 March 2019 £000 Total year to 31 March 2018 £000 Defined benefit obligation (273,909) (256,192) Fair value of plan assets 238,277 233,403 Deficit in the scheme – pension liability (35,632) (22,789) Related deferred tax asset 6,057 3,875 Net pension liability (29,575) (18,914) During the year, many of the global investment markets grew in value so overall investment returns on most major asset classes were positive. This has impacted on the investment returns achieved by the NIWLPS, which were a positive £9.4m (equivalent to a return of about 4%) (2018: positive £7.9m (equivalent to a return of about 3%)). During 2018/19 the Scheme experienced a high number of individual transfers out of the Scheme for members who decided to withdraw their funds. This has impacted on benefits paid which totalled to £17,058k (2018: £26,074k), almost £14m of which was in respect of transfer value payments. Sensitivity of key assumptions The sensitivities to assumptions shown below are broadly symmetrical, i.e., an increase or decrease in the assumption will result in a similar movement in either direction. Impact of: Change in liability 2018/19 % Change in liability 2018/19 £000 Change in liability 2017/2018 % Change in liability 2017/2018 £000 + or - 0.25% in discount rate 6.6 18,200 6.4 16,500 + or - 0.25% in rate of inflation 6.2 17,000 6.0 15,400 + or - 0.25% in salary inflation 0.8 2,300 1.1 2,800 Increase in life expectancy of 1 year 3.5 9,600 3.2 8,300 Reduce long term improvements to 1.25% (1.5) (4,100) (1.4) (3,500) Expected cash flows for the following year £000 Expected employer contributions 10,994 Expected total benefit payments: Year 1 17,587 Year 2 18,131 Year 3 18,693 Year 4 19,272 Year 5 19,868 Then for next 5 years (Total) 108,960 G4 Related parties Parent and ultimate controlling party The Company is a Government owned Company and 100% owned by its ultimate controlling party, the DfI. The results of the Company will not be within the annual financial statements prepared by the DfI, nor in the financial statements of any other entity. Inter-Company debtor and creditor balances with the DfI and other government bodies will be supplied to the DfI for the Whole of Government Accounts. The Company transacts with other Government Departments, Agencies, and NDPBs, in the normal course of business and in accordance with standard business terms. Related party disclosures with DfI are as follows: At 31 March 2019 £000 At 31 March 2018 £000 Subsidy Revenue subsidy from DfI (credited to revenue) 299,926 290,437 Revenue relating to road drainage (credited to revenue) 21,861 21,047 Other receivables - subsidy (included in other receivables - Note C4) 1,621 1,755 Other sales to DfI (credited to revenue) 2,529 1,278 Trade receivables - other sales to DfI (included in trade receivables - Note C4) 338 246 Purchases Purchases from DfI (included in operating costs or capital expenditure) 705 411 Accruals - purchases from DfI (included in accruals - Note D2) 379 378 Loans and borrowings Loans from DfI during the year 64,000 69,000 Balance on loans from DfI at year end - Note B1 1,146,560 1,082,560 Loan interest to DfI - Note B2* 49,789 48,365 Loan interest owed to DfI at year end 2,081 1,438 Dividends Dividend to Shareholder - Note B3 26,461 24,524 * loan interest stated before capitalisation of £5,014k (2018: £5,361k) of interest. No guarantees are given to or received from DfI in relation to the previous balances. There are no provisions for doubtful debts related to the amounts above and no expense recognised in the year in respect of bad and doubtful debts due from DfI. Key management personnel’s compensation Details of the key management personnel’s post-employment defined benefit plan and termination benefits are included in the Directors’ remuneration report on pages 82 to 86. Key management personnel’s compensation is disclosed in Note E1a. Key management personnel’s and Directors’ transactions The key personnel and Directors did not carry out any transactions with related parties of the Group. G5 Subsequent events There were no subsequent events that need to be brought to the attention of the users of the financial statements.