IAS 26 requires the present value of the Fund's promised retirement benefits to be disclosed, and for this purpose the actuarial assumptions and methodology used should be based on IAS 19 rather than the assumptions and methodology used for funding purposes. The assumptions adopted are shown in "Appendix B2 - additional considerations" below.
The movement in the value of the Fund's promised retirement benefits for IAS 26 is as follows:
| £m |
|---|
| Start of period liabilities | 1,481 |
|---|
| Interest on liabilities | 84 |
|---|
| Net benefits accrued / paid over the period* | (23) |
|---|
| Actuarial (gains) / losses (see below) | (25) |
|---|
| End of period liabilities | 1,517 |
|---|
Key factors leading to actuarial gains above are:
Change in financial assumptions: Corporate bond yields increased over the year, with a corresponding increase in discount rate from 5.8% p.a. to 6.2% p.a. The long-term assumed CPI also increased over the year from 2.6% p.a. to 2.9% p.a. The net effect is a small reduction in liabilities.
Change in demographic assumptions: As noted in Appendix A2, the mortality assumptions have been updated to reflect the latest mortality study carried out for the 2025 actuarial valuation. This acts to slightly reduce the liabilities.
Pension increases / inflation experience: The figures allow for the impact of actual CPI over the year compared to the start of period assumption (experience to September 2025 fed into the April 2026 pension increase of 3.8%, and actual inflation from that point will feed into the 2027 increase). As inflation over the year was higher than the long-term assumption, this slightly increases the liabilities.
Allowance for 2025 actuarial valuation results: The figures allow for the now completed 2025 actuarial valuation of the Fund. The effect of this is a small reduction in liabilities.
Michelle Doman
Clive Lewis
Fellow of the Institute and
Fellow of the Institute and
Faculty of Actuaries
Faculty of Actuaries
Mercer Limited
June 2026