Select Committee on Members' Fund - Report by the Government Actuary on the Valuation of the Fund as at 30 September 2003 Report


  4.1  Appendix A summarises the changes in the numbers of beneficiaries during the period under review. 23 beneficiaries died during the inter-valuation period. The resulting reduction in expenditure was partly offset by five new awards to widows of former Members. The total number of beneficiaries receiving payments decreased from 141 to 123 over the three-year period. In total, the 123 regular awards in payment at the valuation date gave rise to an aggregate annual payment of £186,799.

  4.2  The income and expenditure of the Fund from 1 October 2000 to 30 September 2003 is summarised in Appendix B. During this period the amount of the Fund, as shown in the accounts, decreased from £4,762,596 to £3,306,536. The cause of this decrease in the Fund was mainly attributable to the decrease in asset values, since Grants in Aid and Member Contributions were very nearly sufficient to meet all expenditure on benefits and administrative overheads. The income/expenditure figures and assets are summarised from the annual accounts prepared by the Trustees and audited by the Comptroller and Auditor General. I have relied on the audited accounts as proof of the existence of the assets.

  4.3  The assets held at the valuation date, and at the date of the previous valuation, were as follows:

Market value at 30.9.2000
Market value at 30.9.2003
UK & overseas bonds821 387
Cash and other current assets232 186

  4.4  At the valuation date, the Fund was invested 83% in equities. The outstanding liabilities of the Fund comprise regular payments to beneficiaries with a relatively high average age and, if no new awards of this type are to be made, the average term of liabilities will become increasingly short. In these circumstances, it may become necessary for some assets to be sold in forthcoming years, particularly if Grants in Aid were discontinued. With such a high proportion of the investment portfolio invested in equity-type assets, whose capital value can fluctuate considerably, losses may be incurred if equities have to be sold at depreciated prices.

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Prepared 28 October 2004