IAS19 Defined Benefit Pension + Mortgage Portfolio Analysis
Defined benefit pension schemes
Group IAS19 Defined Benefit Pension (deficit)/surplus
Bank of Ireland
Total Group defined benefit pension scheme assets (%)
3.80%
3.60%
€7.2bn
€7.2bn
€8.4bn
€8.9bn
€9.6bn
€6.9bn
€7.0bn
2.10%
2.00%
1.30%
1.35%
55%
65%
65%
69%
66%
66%
67%
0.80%
€0.89bn
€0.60bn
€0.70bn
21%
23%
23%
21%
24%
29%
27%
24%
12%
12%
10%
10%
5%
6%
(€0.23bn)
(€0.48bn)
Dec 17
Dec 18
(€0.14bn)
(€0.13bn)
Dec 19
Dec 17
Dec 18
Dec 19
Dec 20
Dec 21
Dec 22
Jun 23
Dec 20
Dec 21
Dec 22
Jun 23
Listed equities
Diversified assets¹
Credit/LDI/Hedging
EUR Discount Rate
118
■IAS19 DB pension (Deficit) / Surplus
IAS19 pension sensitivities
(Dec 2017 / Dec 2018 / Dec 2019 / Dec 2020 / Dec 2021 / Dec 2022 / Jun 2023)
€m
88
Interest rates¹
107
Credit spreads²
103
4
Inflation³
1 Sensitivity of Group funding requirement to a 0.25% decrease in interest rates
☐ 9L-
-11
2 Sensitivity of IAS19 liabilities to a 0.10% decrease in credit spread over risk free rates
Sensitivity of Group funding requirement to a 0.10% increase in long term inflation
128
06
102
121
137
78
81
Global equity4
4 Sensitivity of Group assets to a 5% movement in global equity markets with allowance for other correlated
diversified asset classes
•
1 Diversified assets includes infrastructure, private equity, hedge funds and property
IAS19 net pension surplus of €0.889bn at Jun 2023 (€0.7bn net surplus Dec 2022).
Schemes in surplus €0.894bn, schemes in deficit €0.005bn
Both euro and sterling discount rates increased over the half-year (20 bps and 40 bps
respectively). The euro discount rate change was due primarily to increases in the
corporate bond credit spreads and the sterling discount rate change was due primarily
to increases in long term risk free interest rates
The discount rate increases resulted in a reduction in Group DB pension scheme
liabilities, partially offset by a corresponding reduction in the interest rate hedging assets
Long term euro inflation assumptions remained stable in the period at 2.6% while long
term sterling inflation assumptions increased marginally (by 5bps to 3.35%), with the
resulting increase in UK liabilities partially offset by the increase in inflation hedging assets
Further progress was made over the course of the half year on the de-risking of the
investment strategy of the BSPF, the Group's largest pension scheme. When completed
this will result in a further reduction in return-seeking assets and an increase in Credit/
LDI/ Hedging assets
The IAS19 Pension Sensitivities graphs demonstrate the reduction over recent years in
the sensitivity of the Group's pension schemes to movements in interest rates, credit
spreads, inflation and equities
53View entire presentation