Financial Statements For the year ended

Association of Chartered Certified Accountants
Notes to the Financial Statements for the year ended 31 March 2022
21
Deferred tax liabilities
Deferred tax liabilities are calculated in full on temporary differences using a principal tax rate of
25% (2021: 19%). The major deferred tax liabilities recognised by ACCA and the movements thereon during the current period and previous years relate to the pension asset of the UK defined benefit pension scheme. The tax rate applicable to authorised surplus payments from defined benefit schemes is 35%. ACCA has no deferred tax assets.

Deferred tax liabilities
31 Mar
2022
£’000
31 Mar
2021
£’000
At 1 April
Tax charged to reserves:
–
–
Current year provision on pension asset
388
–
At 31 March
388
–
22
Retirement benefit obligations
(a)
General information
The financial statements include the financial impact of defined benefit pension schemes operated in the UK and Ireland, and which closed to future accrual on 31 July 2013. Those schemes provided benefits based on final pensionable pay and on a career average revalued earnings (CARE) basis.
ACCA operates defined contribution plans which are currently administered by Aegon in the UK and
Aon in Ireland. Contributions are invested with Aegon in the UK and with Irish Life in Ireland.
The closed UK defined benefit Scheme is subject to the Statutory Funding Objective (SFO) under the Pensions Act 2004. A valuation of the Scheme is carried out at least once every three years to determine whether the SFO is met. As part of the process ACCA must agree with the Trustees of the Scheme the contributions to be paid to address any shortfall against the SFO. The SFO does not currently impact on the recognition of the Scheme on these accounts. The most recent triennial valuation of the UK Scheme was at 1 January 2019 (the January 2022 valuation is currently in progress. This 1 January 2019 valuation has been updated by the scheme actuary for IAS 19 purposes as at 31 March 2022. The triennial valuation was based on the following principal financial assumptions:
Rate of investment return:
past service 2.3% pa. to retirement, 2.3% pa. thereafter future service 2.3% pa. to retirement, 2.3% pa. thereafter
Limited price indexation of pensions in payment p.a.
Retail price index p.a.
Consumer price index p.a.
Rate of salary growth not applicable as scheme closed to future accrual
The actuarial valuation of the UK Scheme showed that, at 1 January 2019, the market value of Scheme assets was m and the value of pension benefits earned was m. The funding level against technical provisions was therefore 67%. As part of the actuarial valuation ACCA and the Trustees agreed to move to a Long-Term Funding basis calculation for the calculations of the Technical Provisions.
An actuarial valuation for the closed Irish scheme is required to be undertaken at least every 3 years in accordance with Section 56 of the Pensions Act 1990 (as amended) and in accordance with the Trust Deed and Rules of the Scheme. Under Clause 6.1 of the Trust Deed for the Scheme, the Employer shall pay to the Trustees the moneys which the Trustees determine, having considered the advice of the Actuary and consulted with ACCA, to be necessary to support and maintain the Scheme in order to provide the benefits under the Scheme. In addition, Section 42 of the Pensions Act 1990 (as amended) requires the Scheme to satisfy the Funding Standard. The Funding Standard defines the minimum assets that each scheme must hold and sets out the rules that apply if a scheme falls short. The actuarial valuation and the Funding Standard requirements do not impact on the recognition of the Scheme on these accounts.

Association of Chartered Certified Accountants
Notes to the Financial Statements for the year ended 31 March 2022

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