19. Retirement Benefit Obligations (Group and RTÉ)

The Group is the principal sponsoring employer of:

(a) the RTÉ Superannuation Scheme (a funded, contributory, final salary defined benefit pension scheme to which no new employees have been admitted since 1989);

(b) the RTÉ “50/50” Risk-Sharing Pension Scheme (a funded, contributory pension scheme with a core defined benefit (DB) promise based on a capped salary level with a defined contribution (DC) arrangement for earnings above the cap); and

(c) the RTÉ Defined Contribution Pension Scheme (a funded, contributory DC scheme) and also makes contributions to a number of other smaller defined contribution pension schemes on behalf of employees.

The schemes above are established as separate trust funds, each managed by a board of trustees who have responsibility for overseeing the scheme’s operations, including the investment of the scheme’s assets.

(i) Pension charge

The employer pension charge in respect of each year for the various schemes was:

	2022	2021
	€’000	€’000
RTÉ Superannuation Scheme
- current service cost	(942)	(997)
RTÉ “50/50” Risk-Sharing Pension Scheme (DB section)
- current service cost	(2,899)	(2,293)
	(3,841)	(3,290)
RTÉ “50/50” Risk-Sharing Pension Scheme (DC section)	(596)	(433)
RTÉ Defined Contribution Pension Scheme	(10,209)	(10,213)
Other schemes	(28)	(24)

(ii) Defined benefit arrangements

RTÉ Superannuation Scheme:

As is required by the Pensions Act, 1990, independent actuarial valuation reports based on actuarially determined long-term funding assumptions are regularly carried out in respect of the RTÉ Superannuation Scheme. The most recent actuarial funding valuation report is dated 1 January 2022. This actuarial funding valuation uses the “attained age” method of valuation to derive the future service cost and has reported a surplus calculated on a total-service funding position. This compares total liabilities (past and future service) with the value of assets plus the value of future employee and employer contributions at standard rates. The actuarial funding valuation report is not available for public inspection; however the results of valuations are advised to members.

The actuaries also carried out a valuation in accordance with the minimum funding standard (MFS) as at 1 January 2022 and have reported a surplus. An Actuarial Funding Certificate has been submitted on this basis. The scheme also met the funding standard reserve at 1 January 2022 and a certificate confirming this outcome has been submitted to the Pension Authority.

As required by the accounting standard IAS 19, the actuaries, Mercer, also prepare a report setting out the position of the RTÉ Superannuation Scheme using the accounting valuation methodology specified in IAS 19. The IAS 19 approach to defined benefit fund accounting valuation and reporting uses the projected unit credit method to derive annual future pension charges, values assets at current fair market value and discounts future liabilities (using high grade corporate bond rates of approximate duration to the estimated life of the liabilities of the scheme) to arrive at a net present value of the liabilities of the scheme. The difference between the asset and liability valuations at 31 December 2022 amounts to an asset of €171.6 million.

The Group expects to pay €0.2 million in contributions to the RTÉ Superannuation Scheme in 2023.

RTÉ “50/50” Risk-Sharing Pension Scheme:

The most recent actuarial funding valuation in respect of the RTÉ “50/50” Risk-Sharing Pension Scheme was carried out as at 1 January 2022. This actuarial funding valuation, which uses the “attained age” method of valuation to derive the future service cost, reported the scheme to have a surplus. The actuarial funding valuation report is not available for public inspection; however the results of valuations are advised to members.

The employer contribution rate to the defined benefit section of the RTÉ “50/50” Risk-Sharing Pension Scheme for the year ended 31 December 2022 was 8.75% of employee members’ remuneration (defined as pensionable salary and allowances up to the cap, currently €48,000 p.a.). The actuaries have also carried out a valuation in accordance with the MFS provisions of the Pensions Act, 1990 and have reported a surplus.

As for the RTÉ Superannuation Scheme, Mercer prepares a report setting out the position of the RTÉ “50/50” Risk-Sharing Pension Scheme using the accounting valuation methodology specified in IAS 19. For this scheme, the difference between the asset and liability valuation at 31 December 2022 amounts to an asset of €9.0 million.

The Group expects to pay €1.6 million in contributions to the RTÉ “50/50” Risk-Sharing Pension Scheme (DB section) in 2023.

Both schemes carry the normal investment and funding risks associated with defined benefit schemes, and short-term volatility in their financial position can be expected. The regulatory risk is, however, limited, as there is no statutory requirement in Ireland for employers to maintain defined benefit plans in existence or to meet any funding shortfalls should they wind up in deficit.

(iii) Net defined benefit asset

At 31 December 2022, the net defined benefit asset in relation to the two defined benefit arrangements is as follows:

	2022	2021
Group and RTÉ	€’000	€’000
Net pension asset in RTÉ Superannuation Scheme	171,637	146,755
Net pension asset in RTÉ “50/50” Risk-Sharing Pension Scheme	8,953	959
	180,590	147,714

Movement in net defined benefit asset/(liability)

RTÉ Superannuation Scheme

	Defined benefit obligation		Fair value of plan assets		Net defined benefit asset/(liability)
	2022	2021	2022	2021	2022	2021
	€’000	€’000	€’000	€’000	€’000	€’000
Balance at 1 January	(1,047,186)	(949,235)	1,193,941	1,096,061	146,755	146,826
Included in Income Statement
Current service cost	(942)	(997)	-	-	(942)	(997)
Interest (cost)/income	(11,254)	(8,317)	12,871	9,641	1,617	1,324
	(12,196)	(9,314)	12,871	9,641	675	327
Included in OCI
Remeasurements gain/(loss)
Actuarial gain/(loss) arising from:
Financial assumptions	157,018	(136,236)	-	-	157,018	(136,236)
Demographic assumptions	-	-	-	-	-	-
Experience	(3,754)	854	-	-	(3,754)	854
Return on plan assets excluding interest income	-	-	(129,535)	134,482	(129,535)	134,482
	153,264	(135,382)	(129,535)	134,482	23,729	(900)
Other
Employer contributions	-	-	478	502	478	502
Employee contributions	(317)	(426)	317	426	-	-
Benefits paid	47,433	47,171	(47,433)	(47,171)	-	-
	47,116	46,745	(46,638)	(46,243)	478	502
Balance at 31 December	(859,002)	(1,047,186)	1,030,639	1,193,941	171,637	146,755

RTÉ “50/50” Risk-Sharing Pension Scheme

	Defined benefit obligation		Fair value of plan assets		Net defined benefit asset
	2022	2021	2022	2021	2022	2021
	€’000	€’000	€’000	€’000	€’000	€’000
Balance at 1 January	(31,860)	(24,314)	32,819	28,304	959	3,990
Included in Income Statement
Current service cost	(2,899)	(2,293)	-	-	(2,899)	(2,293)
Interest (cost)/income	(541)	(340)	577	413	36	73
	(3,440)	(2,633)	577	413	(2,863)	(2,220)
Included in OCI
Remeasurements gain/(loss)
Actuarial gain/(loss) arising from:
Financial assumptions	14,601	(4,316)	-	-	14,601	(4,316)
Demographic assumptions	-	-	-		-	-
Experience	1,622	(5)	-	-	1,622	(5)
Return on plan assets excluding interest income	-	-	(6,952)	1,794	(6,952)	1,794
	16,223	(4,321)	(6,952)	1,794	9,271	(2,527)
Other
Employer contributions	-	-	1,586	1,716	1,586	1,716
Employee contributions	(869)	(874)	869	874	-	-
Benefits paid	143	147	(143)	(147)	-	-
Insurance premium	136	135	(136)	(135)	-	-
	(590)	(592)	2,176	2,308	1,586	1,716
Balance at 31 December	(19,667)	(31,860)	28,620	32,819	8,953	959

(iv) Scheme assets

The fair value of the assets at 31 December was:

	RTÉ Superannuation Scheme		RTÉ “50/50” Risk-Sharing Pension Scheme
	2022	2021	2022	2021
	Fair value €’000	Fair value €’000	Fair value €’000	Fair value €’000
Debt instruments:
Government bonds	422,419	482,998	-	-
Corporate bonds	55,418	59,875	-	-
Total debt instruments	477,837	542,873	-	-
Derivatives	62	39	-	-
Investment funds:
Equity	307,657	368,445	12,556	15,927
Bonds	-	-	14,123	14,208
Cash	12,662	49,569	-	-
Property	47,256	51,632	795	837
Hedge funds	71,460	65,020	-	-
Private equity	106,411	100,867	-	-
Total investment funds	545,446	635,533	27,474	30,972
Cash and cash equivalents:
Cash	5,655	13,928	188	548
Other investment balances	1,639	1,568	958	1,299
Total cash and cash equivalents	7,294	15,495	1,146	1,847
Total fair value of assets	1,030,639	1,193,941	28,620	32,819

Equities are held as funds with underlying assets quoted in an active market. Debt instruments are held on a segregated basis (RTÉ Superannuation Scheme).

(v) Defined benefit obligation

(i) Actuarial assumptions

Below are the major assumptions used for the purposes of the IAS 19 based accounting valuation of the pension schemes.

	RTÉ Superannuation Scheme		RTÉ “50/50” Risk-Sharing Pension Scheme
	2022	2021	2022	2021
Average projected rate of increase in salaries:
Over the next two years	2.5%	2.0%	2.5%	2.0%
Over the following two years	2.5%	2.0%	2.5%	2.0%
Thereafter	2.5%	2.0%	2.5%	2.0%
Average projected rate of increase in pensions:
Over the next two years	4.0%	2.5%	2.5%	2.0%
Thereafter	4.0%	2.5%	2.5%	2.0%
Discount rate	4.1%	1.1%	4.2%	1.7%
Inflation assumption	2.5%	2.0%	2.5%	2.0%
Mortality	Years	Years	Years	Years
Life expectancy future retirees
Male of age 65 (born 1967)	24.5	24.4	24.5	24.4
Female of age 65 (born 1967)	26.5	26.4	26.5	26.4
Life expectancy existing pensioners
Male of age 65 (Born 1957)	23.7	23.6	23.7	23.6
Female of age 65 (Born 1957)	25.6	25.5	25.6	25.5

At 31 December 2022, the weighted average duration of the defined benefit obligations were:

RTÉ Superannuation Scheme: 11.2 years

RTÉ “50/50” Risk-Sharing Pension Scheme: 26.1 years

(ii) Sensitivity analysis

Consideration has been given to the impact on the defined benefit obligation of changes in the key underlying actuarial assumptions. The impact shown is as at the reporting date and in each case it is assumed that all other assumptions remain unchanged.

	RTÉ Superannuation Scheme		RTÉ “50/50” Risk-Sharing Pension Scheme
	Assumption	Benefit obligation €000s	Assumption	Benefit obligation €000s
Discount rate
Current rate	4.1%	859,002	4.2%	19,667
-0.25%	3.85%	883,524	3.95%	21,003
+0.25%	4.35%	835,570	4.45%	18,436
Salary & pension increases
Current assumption (long term)	2.5%	859,002	2.5%	19,667
0.25% lower increases	2.25%	834,647	2.25%	18,441
0.25% higher increases	2.75%	884,379	2.75%	20,991
Mortality
Current assumption (offset from standard table)	-1 year	859,002	-1 year	19,667
No offset	0 years	822,544	0 years	19,239
Two years offset	-2 years	895,978	-2 years	20,090