34. Post-employment benefit plans and related risks

An overview of the Group’s post-employment benefit plans and the related risks is given below. The additional information required by IAS 19, which relates only to the Group’s defined benefit pension plans and post-employment medical benefits obligations, is set out in note 35.

(a) Funded pension plans

The Group’s principal defined benefit plan is the Experian Pension Scheme, which provides benefits for certain UK employees. The plan was closed to new entrants in 2009. On 1 September 2021, the outcome of a consultation with active members of the plan, on the proposal to cease future accrual of new benefits, was determined. The plan was closed to the future accrual of new benefits from 1 April 2022, and active member benefits were crystallised as deferred pensions from that date. No material impact on the Group’s net post-employment benefit assets resulted from this change. All UK employees were offered membership of the Group’s UK defined contribution plan from April 2022.

The Experian Pension Scheme has rules which specify the benefits to be paid, with the level of pension benefit that an employee will receive on retirement dependent on age, length of service and salary. As at 31 March 2022, there were 86 (2021: 95) active members of this plan, 1,239 (2021: 1,309) deferred members and 2,462 (2021: 2,494) pensioner members.

The Group provides a defined contribution plan to other eligible UK employees. This was formerly the Experian Retirement Savings Plan (ERSP), however during the year a new plan was launched, namely the Experian Pensions Savings Plan, which is part of a mastertrust arrangement managed by Legal and General Group plc. The assets of the Experian Retirement Savings Plan were transferred to the Experian Pensions Savings Plan during February 2022. Under this new plan, as before, employee and employer contributions are paid by the Group into an independently administered fund, which is used to fund member pensions at retirement. As at 31 March 2022, there were 3,195 active members of this plan (2021 ERSP: 3,080).

UK pension plans are governed by trust deeds, which ensure that their finances and governance are independent from those of the Group. Trustees are responsible for overseeing the investments and funding of the plans and plan administration. The UK pensions environment is regulated by The Pensions Regulator whose statutory objectives and regulatory powers are described on its website at www.thepensionsregulator.gov.uk.

A full actuarial funding valuation of the Experian Pension Scheme is carried out every three years, with interim reviews in the intervening years. The latest full valuation was carried out as at 31 March 2019 by independent qualified actuaries Mercer Limited, using the projected unit credit method and there was a small funding surplus. The next full valuation will be carried out as at 31 March 2022.

Employees in the USA, Brazil and South Africa have the option to join local defined contribution plans and, as at 31 March 2022, there were 4,666 (2021: 4,455) active members in the USA, 1,151 (2021: 1,100) in Brazil and 513 (2021: 485) in South Africa. There are no other material funded pension arrangements.

(b) Unfunded pension arrangements

The Group’s unfunded pension arrangements were designed to ensure that certain senior managers who are affected by the earnings cap, which was introduced by the UK government some years ago to set a ceiling on the amount of benefits that could be paid by defined benefit pension plans, are placed in broadly the same position as those who are not. There are also unfunded arrangements for certain former directors and employees of Experian Finance plc and Experian Limited. Certain of these unfunded arrangements in the UK have been secured by the grant to an independent trustee of charges over an independently managed portfolio of marketable securities owned by the Group and reported as financial assets revalued through OCI (note 30(a)).

(c) Post-employment medical benefits

The Group operates a plan which provides post-employment medical benefits to certain retired employees and their dependant relatives. This plan relates to former employees in the UK and, under it, the Group has undertaken to meet the cost of post-employment medical benefits for all eligible former employees who retired prior to 1 April 1994 and their dependants.

(d) Related risks

Through its defined benefit pension plans and post-employment medical benefits plan, the Group is exposed to a number of risks that are inherent in such plans and arrangements, which can be summarised as follows:

• asset value volatility, with the associated impact on the assets held in connection with the funding of pension obligations and the related cash flows;
• changes in bond yields, with any reduction resulting in an increase in the present value of pension obligations, mitigated by an increase in the value of plan assets;
• inflation, as pension obligations are generally linked to inflation and the prevailing rate of inflation experienced for medical benefits is typically higher than other inflation measures in the UK; and
• life expectancy, as pension and medical benefits are generally provided for the life of beneficiaries and their dependants.

There are no unusual, entity-specific or plan-specific risks, and no significant concentrations of risk.