House of Lords written question – answered on 26th June 2012.

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Photo of Lord Laird Lord Laird UUP

To ask Her Majesty's Government what the costs of Ofcom have been in each year since its commencement; how much has been paid each year by way of employer and other cash contributions to staff pension schemes and pension deficit repair payments to Ofcom pension plans; and what percentage of annual expenditure such payments have represented.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Lords Spokesperson (Department for Culture, Media and Sport), Baroness in Waiting (HM Household) (Whip)

Ofcom's costs are set out in Ofcom's annual reports, which are available online at: and-plans/annual-reports.

Ofcom's primary means of providing pension benefits is through a defined contribution pension allowance that is available to all staff. Ofcom staff are employed on terms with access to a stakeholder pension plan. The allowance may be used to contribute to the Ofcom-defined contribution stakeholder pension plan.

Staff who joined Ofcom from legacy regulators were entitled to retain membership of one of two defined benefit (DB) pension plans. Both these plans were closed to new entrants from the date Ofcom assumed its powers on 29 December 2003. Following consultation with plan members, Ofcom closed both plans to future accrual from 1 June 2011.

The defined benefit obligation disclosed in the annual accounts has been calculated in accordance with IFRS accounting standards. Ofcom's cash contributions to the two defined benefit plans are, however, determined in accordance with the Pensions Act 2004 and this requires a significantly more prudent measure of the liabilities than IFRS. Pensions Act funding valuations with an effective date of 31 March 2012 are currently in progress for both defined benefit plans. The results of these valuations are not yet known but, unlike under IFRS, they are expected to show a significant deficit.

The below table sets out the employer contributions and deficit repair payments made by Ofcom for both the defined contribution and defined benefit schemes. No other cash contributions have been made to the pension schemes.

Employer Contributions Employer Contributions Deficit Repair Payments Total Pension Scheme Costs Actual Operating Cost Outturn %
DC scheme DB scheme
£'000 £'000 £'000 £'000 £'000
2003-04* 400 628 - 1,028 31,384 3.30%
2004-05 2,000 3,078 122 5,200 121,555 4.30%
2005-06 2,000 5,107 4,493 11,600 128,986 9.00%
2006-07 3,100 4,052 508 7,660 129,420 5.90%
2007-08 3,100 3,910 3,000 10,010 130,002 7.70%
2008-09 3,400 3,920 4,500 11,820 127,623 9.30%
2009-10 3,700 - 14,020 17,720 129,270 13.70%
2010-11 3,700 2,830 4,060 10,590 125,308 8.50%

*3 month period only from 29 December 2003 to 31 March 2004 2011-12 data will be laid before Parliament and published in July 2012

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