Notes to the Financial Statements

An tÚdarás um Ard-Oideachas was established on 15 May 1972 to perform functions assigned to it by Acht an Údaráis um Ard-Oideachas 1971. All income and expenditure for the year relates to continuing activities at the reporting date.

1. Accounting Policies

The basis of accounting and significant accounting policies adopted by the Higher Education Authority are set out below. They have all been applied consistently throughout the year and for the preceding year.

a) General Information
The Higher Education Authority was set up to perform functions assigned to it by Acht an Údaráis um Ard-Oideachas 1971, with offices at 3 Shelbourne Buildings, Crampton Avenue, Shelbourne Road, Ballsbridge, Dublin 4.

The Higher Education Authority is the statutory funding body for the Irish higher education sector and is responsible for the allocation of monies provided by the Oireachtas for universities, institutes of technology and other designated institutions.

It leads the strategic development of the Irish higher education and research system with the objective of creating a coherent system of diverse institutions with distinct missions, which is responsive to the social, cultural and economic development of Ireland and its people and supports the achievement of national objectives.

It monitors the performance of higher education institutions and provides accountability to the Minister in respect of the performance and governance of the higher education sector. The Higher Education Authority is a Public Benefit Entity.


b) Statement of Compliance
The financial statements of the Higher Education Authority for the year ended 31 December 2018 have been prepared in accordance with FRS 102, the financial reporting standard applicable in the UK and Ireland issued by the Financial Reporting Council (FRC), as promulgated by Chartered Accountants Ireland.


c) Basis of Preparation
The financial statements have been prepared in accordance with FRS 102 and under the historical cost convention, except for certain assets and liabilities that are measured at fair values as explained in the accounting policies below. The financial statements are in the form approved by the Minister for Education and Skills and Department of Public Expenditure and Reform with the concurrence of the Minister for Finance under the Acht an Údaráis um Ard-Oideachas 1971.

The financial statements reflect the requirements of the Code of Practice for the Governance of State Bodies 2016. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Higher Education Authority’s financial statements. An tÚdarás is exempt from Corporation Taxation under a Charitable Status Order. On this basis, no tax in respect of Corporation Tax has been included in the Financial Statements.


d) Basis of Accounting
The Financial Statements have been prepared in accordance with Financial Reporting Standard 102 (FRS 102). These statements are prepared on an accruals basis, except as stated below, and are in accordance with generally accepted accounting practice. Financial Reporting Standards, recommended by the Accounting Standards Board, are adopted as they become effective. Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date.


e) Recognition of Income

(1) Oireachtas Grant
Income from Oireachtas grants represents accrued income in the year. In addition to meeting running expenses these grants may also be applied for certain other purposes, including the purchase of furniture, the replacement of equipment or the carrying out of minor capital projects.

(2) Non-State Grant Income
Income from non-state sources includes monies under the Science without Borders and European Programmes. It represents accrued income in the year.

(3) Refunds
Refunds received from Higher Education Institutions relate to unspent research funding. The amounts received are returned to the Department of Education and Skills on an annual basis.


f) Fixed Assets
The fixed assets of the Authority comprising of motor vehicle, furniture and equipment and computers are stated in the financial statements at cost or valuation less accumulated depreciation and provision for impairment where applicable. If there is objective evidence of impairment of the value of an asset, an impairment loss is recognised in the Statement of Income and Expenditure and Retained Revenue Reserves in the year.

Depreciation and Provision for Impairment
Computers and Motor Vehicle are depreciated at a rate of 33 1/3 % per annum straight-line method. All other fixed assets are depreciated at a rate of 10% per annum straight-line method. Where evidence of impairment exists the Authority compares the carrying value of the affected assets with the value in use and expected disposal proceeds less cost to sell. Value in use is measured as discounted cash-flows expected to flow from similar assets grouped as cash-generating units. Motor Vehicle has been depreciated over the remaining three years of the five-year lifecycle following original purchase in 2016.


g) Capital Funding
The assets of the Authority are financed out of administration grants. The Capital Reserve Account represents the amount of income allocated for capital purposes less the amount released to revenue over the life of the assets.


h) Grants allocated to Universities, Institutes of Technology and Designated Institutions
The expenditure under these headings represents the grants which were allocated to the Universities, Institutes of Technology and other higher education institutions in respect of the year. The grants allocated to the institutions are as follows:

(1) Recurrent Grants
These grants constitute the core funding to the higher education institutions.

(2) Capital Grants
These grants are used to meet building, infrastructure, property acquisitions and refurbishment costs, and in certain circumstances may be used to fund equipment and furniture.

(3) Research Grants
These grants comprise:

  • Funding under the Programme for Research in Third Level Institutions (PRTLI) for recurrent and capital purpose schemes funded by Department of Business, Enterprise and Innovation (DBEI).
  • Funding under the Research Schemes of the Irish Research Council.
    Funding since 1 October 1999 on behalf of the Department of Education and Skills (DES) under a post-doctoral fellowship scheme.

Unspent research allocations refunded to the HEA are payable to the DES and DBEI.

(4) Access Grants
These grants comprise

  • Student Assistance Fund (SAF)
  • Fund for Students with Disabilities (FSD)
  • Programme for Access to Higher Education (PATH)

(5) Erasmus
Any unspent Erasmus funding is included in payables and accrued expenditure, Accruals General Note 9, and as a repayable creditor in Note 12.


i) Defined Pension Benefit Scheme Costs
Pension costs reflect pension benefits earned by employees in the period and are shown net of staff pension contributions which are retained by the Higher Education Authority. An amount corresponding to the pension charge is recognised as income to the extent that it is recoverable and offset by grants received in the year to discharge pension payments.
Pension costs under FRS 102 are assessed in accordance with actuarial advice based upon the latest actuarial valuations and assumptions determined by the actuary.
Actuarial gains or losses arising on scheme liabilities are reflected in the Statement of Comprehensive Income and a corresponding adjustment is recognised in the amount recoverable from the Department of Education and Skills.
Pension liabilities represent the present value of future pension payments earned by staff to date. Deferred pension funding represents the corresponding asset to be recovered in future periods from the Department of Education and Skills.
All the HEA pension schemes are outlined in Note 19 of the financial statements.


j) Significant Accounting Judgements and Estimates
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements have had the most significant effect on amounts recognised in the financial statements.

Retirement Benefit Obligation
The assumptions underlying the actuarial valuations for which the amounts recognised in the financial statements are determined (including discount rates, rates of increase in future compensation levels, mortality rates and healthcare cost trend rates) are updated annually based on current economic conditions, and for any relevant changes to the terms and conditions of the pension and post-retirement plans.
The assumptions can be affected by:

(1) The discount rate, changes in the rate of return on high-quality corporate bonds
(2) Future compensation levels, future labour market conditions
(3) Health care cost trend rates, the rate of medical cost inflation in the relevant regions.

Deferred Income
The determination of deferred income amounts, particularly Research income, will impact on the Surplus/Deficit for the year and the Revenue Reserves at Statement of Financial Position date. Income is deferred to the period in which the related commitments arise.


k) Members Interests
The Authority adopted procedures in accordance with guidelines issued by the Department of Public Expenditure & Reform (DPER) in relation to the disclosure of interests by Authority Members and these procedures have been adhered to in the year. There were no transactions in the year in relation to the Authority’s activities in which the Authority Members had any beneficial interest.


l) Operating Leases
Rental expenditure under operating leases is recognised in the Statement of Income and Expenditure and Retained Revenue Reserves over the life of the lease. Expenditure is recognised on a straight-line basis over the lease period, except where there are rental increases linked to the expected rate of inflation, in which case these increases are recognised when incurred. Any lease incentives received are recognised over the life of the lease.

2. Oireachtas Grants

 Notes2018 €’0002017 €’000
Recurrent Grants1,131,1161,045,233
Access Grants25,13820,261
 1,156,2541,065,494
Capital Grants29,62121,626
Research Grants52,017 58,958
Administration Grants8,1657,901
111,246,0571,153,979

3. Other Income - Administration

 Notes2018 €’0002017 €’000
European Project Financing523478
Other Contribution522330
1,045808
Non-State Grant Income6,04310,722
Total Other Income7,08811,530

4. Grants to Institutions

 Notes2018 €’0002017 €’000
Recurrent Grants1,130,7881,045,477
Access Grants25,39520,620
  1,156,1831,066,097
Capital Grants29,62421,626
Research Grants58,83269,166
1,244,6391,156,889

The research grants to institutions are funded from research income shown under Oireachtas Grants. Non-State research income is shown under Other Income.

5. Administration Overheads

 Notes2018 €’0002017 €’000
Staff Costs   
Salaries and Wages4,5654,000
Retirement Benefits19b1,4121,106
Travel and Subsistence Domestic5b119136
Travel and Subsistence International5b14597
Hospitality5c22
6,2435,341
Premises – Upkeep and Overheads
Light and Heating2615
Maintenance174148
Rent & Insurance753751
Depreciation9375
1,046989
General Administration Costs
Office Expenses142168
Postage and Telephone4754
Bank Charges21
Information Technology185193
Staff Development6047
Audit Fees2845
464508
Education Research and Development
Publications826688
Seminars123105
Research and Survey Fees5a1,352759
Assessors Costs527348
HERA, Council and European Projects6739
European Social Fund (ESF) Membership74
Career and Appointments4752
 2,9491,995
 
Board Members Fees187368
Total10,7758,901

5a. Research and Survey Fees

 2018 €’0002017 €’000
Strategic Dialogue, National Strategy, RGAM Review, System Performance and Policy Advice, Panel Members and Other511201
Database Support and Website Consultancy10894
Marie Curie Support for Postgraduates9080
Internal/External Audits, EU Article 13 Checks and Capital Spot Checks, Taxation and Other26565
Access and PATH Reviews7857
Legal Fees6436
Recruitment Costs2214
Governance Review1520
Other Reviews and General Consultancy62212
1,352759

5b. Travel and Subsistence

 2018 €’0002017 €’000
Domestic
– Board1110
– Staff108126
International
– Board2513
– Staff12084
264233

5c. Hospitality

 2018 €’0002017 €’000
Staff02
Client/Third Parties20
22

6. Tangible Fixed Assets and Equipment

Motor Vehicle €’000Furniture & Equipment €’000Computer Equipment €’0002018 Total €’0002017 Total €’000
Cost
Cost or Valuation at 1 January 201801,8592,2464,1054,023
Additions during the year173195143102
Disposals during the year(-)(-)(-)(-)(20)
At 31 December 2018171,8902,3414,2484,105
Depreciation
Balance at 1 January 201801,8232,1683,9913,936
Charge for the year610779375
Less Depreciation on Disposals(-)(-)(-)(-)(20)
61,8332,2454,0843,991
Net Book Value at 31 December 2018115796164114
Net Book Value at 31 December 20170367811487

7. Capital Reserve

Note2018 €’0002017 €’000
Balance at 1 January611487
Oireachtas Grant143102
Amount released to Income Depreciation(93)(75)
Balance at 31 December164114

8. Receivables and Prepayments

 2018 €’0002017 €’000
Amounts falling due within one year
Research Grants Receivable271680
Receivables and Prepayments444394
7151,074

There are no amounts falling due after more than one year.

9. Payables and Accrued Expenditure

 2018 €’0002017 €’000
Amounts falling due within one year
Accruals
– General8,7186,750
– Recurrent7,74210,723
– Research Grants payable251263
– Access/Springboard Grants received in advance10,25612,172
– Research Grants received in advance12,48011,027
39,44740,935

There are no amounts falling due after more than one year.

10. General Reserve

 2018 €’0002017 €’000
Balance 1 January2,8502,485
Surplus/(Deficit) for year(1,258)365
Balance at 31 December1,5922,850

11. Analysis of Deferred Grants and HEA Grant Income for the Year Ended 31 December 2018

State Income

Name of GrantorName of GrantPurpose of GrantOpening DeferralGrant Received Closing DeferralIncome and Expenditure
   01-Jan-18201831-Dec-182018
   €’000€’000€’000€’000
Department of Education and Skills*General Current Grants Vote 26 C4Funding recurrent grants of universities, institutes of technology and other institutions9971,010,9801,1001,010,877
Department of Education and SkillsNTF Labour Market FocusedFunding recurrent grants of universities, institutes of technology and other institutions037,000037,000
Department of Education and SkillsNTF ApprenticeshipFunding New and Craft Apprentices in universities and institutes of technology032,000032,000
Department of Education and SkillsSuperannuation Vote C10.2Funding university pensions021,550021,550
Department of Arts Heritage and the GaeltachtIrish Vote 33 C4Funding Irish in universities and institutes of technology1541,17601,330
Department of Education and SkillsNTF Springboard+ Vote 26 (Part)Funding Springboard in universities, institutes of technology and other institutions5,31929,9286,88928,358
Department of Education and SkillsAccess Grants Vote 26 C11Funding access to universities and other institutions5,85621,5492,26725,138
Department of Education and SkillsCapital Vote D4Funding capital in universities, institutes of technology and other institutions029,621029,621
Department of Education and Skills **Research Grant, Recurrent and Capital Vote 26 C12Funding research in universities, institutes of technology and other institutions5,60840,8067,19639,218
Department of Business Enterprise and Innovation ***Research Grants including PRTLI Vote 32 B5Funding research in universities, institutes of technology and other institutions012,800012,800
Department of Education and SkillsAdministration Grants Vote 26 Part C12Funding administration grants of HEA and IRC08,16508,165
TOTAL STATE GRANT INCOME17,9341,245,57517,4521,246,057

*Department of Education and Skills Funding Recurrent Grants – This includes Linc Grants €1,508k. This is received from Department of Children and Youth Affairs. GOI €1.1m
**Department of Education and Skills (DES) Research Grants includes HEAnet Grants and other sundry research grants.
***Includes eJournals and ICHEC Research Grants

12. Lifelong Learning Programme – EU

The HEA is the national agency in Ireland for the EU funded Life Long Learning programme.

Erasmus+ Grants Scheme
This scheme provides grants for transnational student mobility within the member states of the EU, covering a period between three and twelve months. To be eligible a person must be a fully registered student pursuing a full time course in an approved third level institution.

Funding is received from the EU and paid out to the Universities and Colleges on an academic year basis. Allocations to Universities and Colleges for the 2018/2019 and 2017/2018 academic years were €13.18 million and €10.86 million respectively.

Unexpended amounts are refundable to the EU at the end of each academic year.

At 31 December 2018, an amount of €1.26 million was refundable to the EU in respect of academic years up to 2017/2018. For the academic year 2018/2019 the amount, if any, refundable to the EU will be established on finalisation of all claims.

2018 €’0002017 €’000
Balance 1 January5,8254,350
Income
Grant13,17710,861
Bank Interest(6)1
  
Less18,99615,212
Expenditure
Grants to Universities, Colleges and other institutions10,3989,352
Refund to EU1,07435
11,4729,387
Balance at 31 December7,5245,825

The Creditors balance for Erasmus+ is included in Note 9, Payables and Accrued Expenditure, Accruals General.

13. Capital Commitments

The amount of capital commitments under contract and approved by the HEA on behalf of the Department of Education and Skills (DES) and the Department of Business, Enterprise and Innovation (DBEI) at 31 December 2018 amounted to €21.9 million (2017: €16.5 million). Commitments not under contract but approved by the Authority are estimated at €84.6 million at 31 December 2018 (2017: €7.6 million). The Capital commitment of €3.8 million (included in the €21.9m above) is related to the Programme for Research in Third Level Institutions (PRTLI) and the Programme is funded by the DBEI. The remainder relates to general capital commitments funded by the DES.

14. Lease of Accommodation

Premises at 3 Shelbourne Buildings, Shelbourne Road, Ballsbridge, Dublin 4 are held under two separate tenancy agreements. The first floor is held under a 25-year agreement from May 2001 with a 5-year rent review at an annual cost of €0.521 million.

The ground floor is held under a 25-year agreement from November 2001 with a 5-year review at an annual cost of €0.320 million. The HEA signed a Deed of Variation to its lease on 27 August 2015. The lease expires on 31 March 2026.
The rent was reduced on 27 August 2015 as follows: – Ground Floor to €0.281m and First Floor to €0.456m. Rent figures exclude car parking costs of €39,000 paid by the HEA. The next rent review date is 31 March 2021.

Total future minimum lease payments under non-cancelable operating leases are as follows:

 2018 €’0002017 €’000
Within 1 year737737
Between 1 and 5 years2,9482,948
After 5 years1,6582,395
5,3436,080

15. Comparative Figures

Comparative figures in the prior year have been adjusted to conform with changes in presentation in these financial statements.

16. Related Parties

HEAnet Ltd. was incorporated on 12 November 1997. The company is limited by guarantee with no share capital and the Higher Education Authority is an ordinary member of the company. Other ordinary members of the company are TCD, UCC, UCD, NUIG, UL, DCU, NUIM, DIT, Athlone IT, Carlow IT and DBEI. HEAnet Group (Including subsidiary company) Income for 2018 was €34 million (2017: €35.4 million). There was a surplus in 2018 of €599k (2017: surplus €1.81m). The company provides internet services to subscriber higher educational and research Institutions as well as primary and post-primary schools and other research organisations. There was an accumulated surplus of €3.09m on the company’s activities as at 31 December 2018, (€2.49m at 31 December 2017). The HEA paid total grants to HEAnet Group of €20.3 million in 2018, (€16.0 million in 2017). The increase in Income and Payments from 2017 to 2018 was due to the consolidation of EduCampus in HEAnet Group Accounts in 2017. The establishing of EduCampus represents a renewed commitment to the next evolution of shared services delivery to the higher education sector as a whole. EduCampus was incorporated after the liquidation of An Chéim.

The vision for EduCampus is to provide new, imaginative and flexible approaches to IT shared services to the higher education sector and to develop quality solutions for an expanded client base.

 

 

17. Key Management Personnel

Key management personnel in HEA consist of the CEO and Members of the Authority. Total compensation paid to key management personnel, including Authority Members fees and expenses and total CEO remuneration, amounted to €277,880 (2017: €204,151).

Employee Benefits

2018    2017
€60,000 to €69,99995
€70,000 to €79,99946
€80,000 to €89,99955
€90,000 to €99,99941
€100,000 to €109,99922
€110,000 to €119,99900
€120,000 to €129,99900
€130,000 to €139,99911
€140.000 +00

The average number of employees (whole-time equivalents) during the year, excluding EU funded IRC posts and temporary agency staff, was 63 for 2018. (2017: 59). The table above shows the number of employees whose total employee benefits fell into the respective bands.  There were no termination payments in 2018.

 

18. Board Members Fees & Expenses

Board MemberStart DateFinish Date2018 € Fees2018 € Expenses2018 € Total2017 € Fees2017 € Expenses2017 € Total
Michael Horgan – Chairman27/07/201611,97021412,18411,97060112,571
Bahram Bekhradnia 27/06/20177,6954,46212,1574,4893,8008,289
Orla Feely27/07/20160221221000
Sinéad O’Flanagan27/07/20167,6957,74515,4407,6955468,241
Michael Kerrigan01/07/201730/06/20183,8482134,0613,84803,848
Deirdre Lillis28/11/20170631631000
Ronan Lyons28/11/2017000000
Jim Mountjoy27/06/20177,69507,6954,48904,489
Lynn Ramsey27/07/201602,0442,04402,5802,580
John Wall27/07/20160000379379
Sharon Feeney27/07/2016000000
Tony Donohoe27/07/20167,6952207,9157,695417,736
Judith Eaton 27/07/20167,69510,52718,2227,6956,99714,692
Pól O’Mórain27/07/20167,6953,44511,1407,6951,4859,180
Darina Kneafsey27/07/20167,6956,11913,8147,6956,23313,928
Síona Cahill01/07/20183,84803,848000
Annie Hoey01/07/201630/06/20170003,84803,848
Mary Canning07/03/201231/01/20170006410641
Brian Thornes07/03/201231/01/20170006410641
Total73,53135,841109,37268,40122,66291,063

Member’s fees and travel and subsistence expenses are paid in accordance with rates set by the Department of Public Expenditure and Reform.  The approved annual fee for members of the HEA is as follows; Chairperson €11,970, Ordinary Member €7,695. Members who finished or started in July were paid a pro-rata fee.

Under the ‘One Person, One Salary’ Principle, the fee is not paid to a member in receipt of a public sector salary.  These are Prof. Orla Feely, Dr Sharon Feeney, Dr Deirdre Lillis, Dr Lynn Ramsey, Prof. Ronan Lyons and Dr John Wall.

Expenses may include directly reimbursable claims or expenses paid on behalf of the Member.

 

Chief Executive Remuneration

Salary 2018 Expenses 2018 Total 2018 Salary 2017 Expenses 2017 Total 2017
Paul O’Toole (Interim CEO 2018)29,96268330,645000
BIK ( Company Car)1,80001,800000
31,76268332,445000
Graham Love (Former CEO)132,8833,180136,063105,4813,259108,740
Anne Looney (Interim CEO 2017)0002,5841,7644,348
Total164,6453,863168,508108,0655,023113,088

Standard public sector pension arrangements applied to Graham Love, Paul O’Toole and Anne Looney. No performance related bonus was applicable.

19. Defined Pension Scheme Benefits

Composition of the schemes
Eligible staff members of the Higher Education Authority have access to two pension schemes. Staff members appointed before 1 January 2013 in general are members of a defined benefit pension scheme approved under Section 15 of the Acht an Údaráis um Ard-Oideachas, 1971 which is funded annually on a pay as you go basis from monies provided by the Department of Education and Skills and from contributions deducted from staff salaries. The benefits on which the FRS 102 calculations are based are set out in:

(a) HEA Staff Superannuation Scheme 1980
(b) HEA Staff Superannuation (Amendment) Scheme 1993
(c) HEA Spouses’ and Children’s Scheme 1985, and
(d) HEA Spouses’ and Children’s (Amendment) Scheme 1992
(e) The Single Public Service Pension Scheme (Single Scheme) 2013

The HEA also operates a voluntary AVC scheme.

The Single Public Service Pension Scheme (Single Scheme) is the defined benefit pension scheme for pensionable public servants appointed on or after 1 January 2013 in accordance with the Public Service Pension (Single Scheme and Other Provisions) Act 2012. The scheme provides for a pension and retirement lump sum based on career-average pensionable remuneration, and spouses’ and children’s pensions. Single Scheme member’s contributions are paid over to the Department of Public Expenditure and Reform. The minimum pension age is 66 years (rising in line with State pension age changes). It included an actuarially reduced early retirement facility from age 55. Pensions in payment increase in line with the consumer price index.

Retirement Benefit Obligation
The valuation used for FRS 102 disclosures has been based on a full actuarial valuation by a qualified independent actuary to take account of the requirements of FRS 102 in order to assess the scheme liabilities.
The principal actuarial assumptions used to calculate scheme liabilities under FRS 102.

At 31/12/2018At 31/12/2017
Discount Rate2.00%1.80%
Rate of Expected Salary Increase2.75%2.75%
Rate of Increase in Pension Payment2.25%2.25%
Inflation1.75%1.75%

The demographic assumptions i.e. mortality rates in service and in retirement are in line with standard tables employed in the actuarial valuations of similar public sector type schemes. This reflects the current trend of improvements in mortality and the general expectation that this trend is set to continue for the immediate future. The tables employed are:

Implied life expectancy for a 65-year-old

 20182017
Post-retirement – current pensioners
Male pensioners22.022.0
Female pensioners24.624.6
Post-retirement – future pensioners
Male pensioners23.023.0
Female pensioners25.525.5

19a. Net Deferred Funding for Pensions in year

 2018 €’0002017 €’000
Funding recoverable in respect of current year1,5831,235
State Grant applied to pay pensioners(477)(565)
1,106670

19b. Analysis of total retirement benefit costs charged to the Income and Expenditure and Retained Revenue Reserves

2018 €’0002017 €’000
Current service cost1,053785
Interest on Pension Scheme Liabilities530450
Employee Contributions(171)(129)
1,4121,106

19c. Funding for retirement benefits

The Higher Education Authority recognises these amounts as an asset corresponding to the unfunded deferred liability for pensions on the basis of the set of assumptions described above and a number of past events. These events include the statutory basis for the establishment of the superannuation scheme, and the policy and practice currently in place in relation to funding public service pensions including contributions by employees and the annual estimates process. While there is no formal agreement regarding these specific amounts with the Department of Education and Skills, the Higher Education Authority has no evidence that this funding policy will not continue to meet such sums in accordance with current practice. The deferred funding asset for pensions as at 31 December 2018 amounted to €30.1 million (2017: €29.7 million).

19d. Analysis of total retirement benefit costs charged to the Statement of Comprehensive Income

 2018 €’0002017 €’000
Experience (losses) on Pension Scheme liabilities(751)(1,368)
Changes in assumptions underlying the present value of Pension Scheme Liabilities1,421(1,664)
Actuarial Gain/(Loss) on Pension Liabilities670(3,032)

19e. Movement in net retirement benefit obligations during the financial year

2018 €’0002017 €’000
Deficit in scheme at beginning of year(29,702)(26,000)
Movement in year:
Current Service Cost(1,053)(785)
Pensions paid in year477565
Interest on Pension Scheme Liabilities(530)(450)
Actuarial Gain/(Loss)670(3,032)
Deficit in Scheme at end of year(30,138)(29,702)

19f. History of defined benefit obligations

 2018 €’0002017 €’0002016 €’0002015 €’000
Experience gains and (losses) on scheme liabilities:(751)(1,368)(1,434)(1,304)
Percentage of Scheme Liabilities(2.5%)(4.6%)(5.5%)6.5%
    
Total amount recognised in the Statement of Comprehensive Income:670(3,032)(5,377)2,471
Percentage of Scheme Liabilities2.2%(10.2%)(20.7%)12.4%

20. Pension Control Accounts

As part of the approach agreed with the Department of Education and Skills and the Department of Finance to resolving the pension deficit in the funded schemes of the university sector, the funded pension schemes of UCD, UCC, NUIG, NUIM, and TCD were closed and new model pay-as-you-go (PAYG) schemes introduced in early 2005. The assets of the closed funded schemes were transferred to the State under the Financial Measures (Miscellaneous Provisions) Act 2009.

The 2009 Act required that these institutions continued to make employer and employee contributions in respect of these closed funded pension schemes. The new model schemes do not require employer contributions. However the HEA, as a measure, continued to provide for employer and employee pension provision in the core grant in respect of staff in the new PAYG schemes in these 5 universities. The allocation of these funds to pension control accounts was made in the context of the overall available resources for the sector as a prudent means of providing for rising pension costs to be met across both closed and model schemes.

The HEA informed the universities that the continuation of this baseline pension provision in respect of both the closed schemes and the new model schemes must be reflected in their core budgets, and must continue to be set aside in a pensions control account and used solely to pay pensions. The HEA further directed that the pension control account should be separately identified within the university’s financial statements and subject to audit by the office of the Comptroller and Auditor General.

The HEA wrote to the universities on 31 August 2016 and requested implementation of the following changes:

With effect from 1 October 2016:

  • All universities to move to a 0% employer contribution rate for Model Scheme core staff (changing the existing approach for UCD, UCC, NUIG, NUIM and TCD).
  • At 30th September each year any surpluses on the Model Scheme control accounts to be transferred to the closed scheme control accounts for UCD, UCC, NUIG, NUIM and TCD.
  • All universities to continue to make employer and employee contributions on non-core staff, irrespective of funding (this to become a requirement under the Delegated Sanction Agreement when published, as it has been to date under the Employment Control Framework).

With effect from 1 January 2017:

  • All universities to account for employee contributions in respect of Model Scheme core staff in the pension control accounts. (This to require UL and DCU to transfer employee pension contributions from core staff to the Statement of Financial position pension control account in line with the practice in the other five universities).
  • The Pension Adjustment Factor in RGAM to be removed.

The reporting of pension control accounts in the Harmonised Accounts of universities should continue in the prescribed format. However effective from 1 October 2016 any surpluses on Model Scheme control accounts at the financial year end should be transferred to the closed scheme control accounts at 30th September on an annual basis. The HEA to formally confirm the required revised format of accounts in this regard in due course.

The model schemes and single pension scheme have surplus balances at 30 September 2018 of €83 million (2017: €56.4 million). The closed schemes have deficit balances at the same date of (€89.4) million (2017: €(44.2) million) giving a net overall deficit of €(6.4) million (2017: €(12.2 million). An appropriate mechanism to regularise the surpluses or deficits on the individual university pension control accounts is under discussion with the Department of Education and Skills.

There were no significant events post year end that would require disclosure in these financial statements.

 

21. Board Approval

The financial statements were approved by the Authority on the 26 March 2019 and signed on 25 June 2019.