Separate Annual Report 2021

63 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | SEPARATE FINANCIAL STATEMENTS 2021 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Separate Financial Statements For the year ended March 31, 2021 (Expressed in Barbados dollars) 41 13. Pension Plan Asset The Credit Union participates in a defined benefit pension plan operated by a reputable insurance provider. The pension plan is jointly funded by payments from the Credit Union and certain employees, taking into account the recommendations of independent qualified actuaries. The actuary periodically (at least every three years) evaluates the financial position of the plan and recommends the future contribution rate for the Credit Union. The last full actuarial valuation of the pension plan for eligible employees was carried out on March 31, 2018. The next full review will be performed in 2021. In a defined benefit pension plan, the employees’ entitlement is determined by a formula based on their years of pensionable service and pensionable salary. It is typical for the employees’ benefit to be integrated with the retirement benefits provided by the National Insurance. The contribution rate paid by the employee is fixed and the Credit Union pays the balance of the ultimate cost of the benefits and hence the Credit Union’s contribution is unknown. The Credit Union is expected to pay $885,408 in contributions to its defined benefit plan in 2022 (2020: $814,237 in 2021). Currently at retirement, employees with service to April 1, 2015 are entitled to receive a pension benefit equal to: 1. 1.75% of their pensionable salary as at April 1, 2015 reduced by 1.32% of the National Insurable Earnings as at April 1, 2015. Plus 2. 1.75% of annual pensional salary earned while a member of the plan after April 1, 2015 reduced by 1.32% of the annual national insurance salary while a member of the plan after April 1, 2015. Employees’ pension benefits are further increased by the amount of pension that can be purchased with any voluntary contributions accumulated with credited interest to their retirement date. There are three trustees of the plan, one is an employee representative while the other two are external to the Credit Union. The trustees are required to understand the risks taken, make reasonable investment decisions, and provide members with information and act in the best interests of the plan participants.