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For people, not profit

B&CE Holdings LimitedAnnual report and financial statements for the year ended 31 March 2017Company registration number: 00377361

Highlights 1

Chairman’s statement 2

Chief Executive Officer’s review 3

An introduction to B&CE 5

Strategic report 13

Directors’ report 20

Independent auditors’ report to the members of B&CE Holdings Limited 23

Consolidated statement of comprehensive income 25

Statement of financial position 26

Statement of changes in equity 28

Consolidated statement of cash flows 29

Notes to the financial statements 30

Contents Page

| B&CE Holdings Limited Annual report and financial statements for the year ended 31 March 2017| B&CE Holdings Limited Annual report and financial statements for the year ended 31 March 20171

HighlightsThe People’s Pension continued to grow rapidly, and remains the UK’s largest private-sector automatic enrolment pension scheme.

As at 31 March 2017, the Scheme had over 2.7 million members and over 48,500 employers signed up.

This year, both B&CE and The People’s Pension have continued to win awards for providing high quality service and support, including Best DC Mastertrust, Best Auto-Enrolment Implementation, and Best Master Trust.

We also finished top for Best Overall Customer Service in the Top 50 Call Centres for Customer Service list – beating household names in financial services and beyond…

We’ve been included in The Sunday Times Top 100 Best Not-for-Profit Organisations to Work For list for the second year in a row, after being accredited with the prestigious Investors in People (IiP) Gold standard in 2016. We were also named Employer of the Year and won the Developing People for Business Success award at the Gatwick Diamond Business Awards.

We now manage assets totalling £4.1 billion for our members and paid out a total of £144 million from our pension schemes during the year.

See page 13 for details



£4.1 billion assets£144 million paid out


After acquiring Constructing Better Health (CBH) in 2016, we’re currently developing a new occupational health model that will better meet the needs of the construction sector.

Our Charitable Trust, founded to give back to the construction sector (where B&CE began), continued to support organisations and individuals in need. The Trust paid out over £275,000 in grants this year.


2.7 million+ members

48,500+ employer accounts

£275,000+ paid in grants

B&CE Holdings Limited Annual report and financial statements for the year ended 31 March 2017 | 2

Chairman’s statement

Welcome to the Annual report and financial statements for the year ended 31 March 2017 for B&CE Holdings Limited. It’s been a very busy year at B&CE, and I’m pleased to be able to report that it’s been another successful one in terms of growth and performance.

We’ve seen our workplace pension scheme, The People’s Pension, grow to 2.7 million members across over 48,500 employers. In that scheme alone we’re responsible for £2bn in assets under management. Overall, B&CE looks after the interests of 4.5 million members and £4.1bn of assets under management.

The more we grow, the greater the economies of scale we are able to achieve, which in turn creates increased value for our customers. And we’ve continued to win industry awards both for B&CE and for The People’s Pension over the last 12 months, which shows how hard we work to make sure we live up to our reputation for high quality support and service.

Over the last year, we’ve been changing how B&CE is structured to improve our corporate governance and create a better fit for the future. We’ve changed our name for a start from Building and Civil Engineering Holidays Scheme Management Limited to B&CE Holdings Limited. And we’ve changed our corporate governance structure – to ensure that both the construction and financial services sides of the business enjoy continued focus and success.

Last year we acquired Constructing Better Health, an occupational health scheme for the construction industry. Our vision is for a new approach which will meet current and future needs for both the industry and for the more than two million people who work within it.

We’re also growing the work of our Charitable Trust, which gives back to organisations supporting the construction sector and to individuals with links to that sector who have fallen on hard times. So we make a difference in smaller ways too – although they can have a massive impact on the people we help.

The next few years will continue to present new challenges. We’re as ambitious about the future, as we’ve always been. Leading the way in financial benefits for the construction sector, and now in mass market pensions too. As a not-for-profit business, B&CE can focus on what matters most – putting people first and growing our services to meet their needs. That’s what we have always done, and always will do.

We could not have achieved any of this without the hard work and dedication of our people and our Board. On behalf of the Board, I would like to thank everyone at B&CE for everything that they’ve done over the last 12 months and no doubt will continue to do in the future.

Chandrasekhar (Babloo) RamamurthyChairman

1 August 2017

As a not-for-profit business, B&CE can focus on what matters most – putting people first and growing our services to meet their needs.

| B&CE Holdings Limited Annual report and financial statements for the year ended 31 March 20173

Chief Executive Officer’s review

This year, B&CE turns 75. And what a journey we’ve had so far. Nobody could have imagined when we were set up to deliver a holiday stamp scheme in 1942 that we’d still be here three quarters of a century later – let alone that we’d have grown as we have, to be running the largest private-sector automatic enrolment workplace pension scheme in the UK.

As a not-for-profit organisation, our values – Creating Simplicity, Showing Compassion and Keeping Promises – drive everything we do. And they always have done.

Over the last year, we’ve seen significant growth in The People’s Pension. More than 2.7 million members have signed up across more than 48,500 employers. That’s an increase of 31,000 employers in the last year, yet our service levels remain strong. We’ve proved that – whatever the volume coming through the doors – we have the capacity not just to cope but to excel. We now look after £2bn in assets under management in The People’s Pension alone. That’s a big responsibility, and one which we take very seriously. That’s why we’re always making improvements for our members, focussing on people not profit.

Last October, we beat a number of household names (not just fellow pension providers) to be awarded Best Overall Customer Service at the Top 50 Companies for Customer Service awards. We also finished top in the Best Insurance and Financial and Best Medium Call Centre categories. This was a particularly big achievement because Top 50 Companies for Customer Service is the only independent customer benchmarking programme in the UK which uses genuine customer feedback from mystery shoppers.

In terms of other industry awards, we built on our successes of last year by winning a number of other awards for best master trust and automatic enrolment implementation, details of which can be found on page 5. We’ve come a long way.

Over the last 12 months we’ve spent a lot of time out and about getting our voice heard – and I’ve been lucky enough to find myself at the heart of the pensions dashboard project. We’ve also made sure we’re part of the debate on greater master trust regulation, and on the 2017 automatic enrolment review.

Making a difference for the people we serve means using the influence we have to speak up on their behalf.

Our priority is to keep delivering high quality service and support to our customers, while growing and innovating for the future.


As I’ve already mentioned, B&CE celebrates 75 years in 2017. It is important to reflect on our roots, which lie very firmly in construction. Three quarters of a century ago, B&CE was founded to operate a holiday stamp scheme for construction workers in the UK. During the Second World War we saw our cities damaged beyond recognition, but not beyond repair. Repairing that damage meant that the construction industry was booming, but those working within it had very few benefits. B&CE changed that.

Over the last decade, the construction industry has become safer – but health has taken too much of a back seat. We know that construction workers are a hundred times more likely to die from an occupational disease than from an accident. This needs to change. And industry leaders have told us that they want to make this change.

We’re really excited about our occupational health work, because it represents a chance to make a difference for the two million men and women working in the construction industry. Just like we did three quarters of a century ago.

Another way we make a difference is through our Charitable Trust, founded to give back to the construction industry. Over the last year, we’ve handed out over a quarter of a million pounds to 17 organisations, including grants for training and research.

We’ve also helped nearly 70 individuals with things like household arrears, home adaptations, funeral expenses and training to get back into construction work. Sometimes it’s the little things that really make a difference.

We’re passionate about developing our people and making sure they love what they do. In 2017, we made The Sunday Times 100 Best Not-for-Profit Organisations to Work for list for the second year in a row, in addition to our Investors in People Gold accreditation. Our people really are our business. I’d like to take this opportunity to thank all our staff for everything they do to put our customers first. Without them, and their enthusiasm and commitment, we wouldn’t be B&CE.

We’re not standing still. The world is changing, and we’ve got more to give. We’ll keep delivering high quality service and support to our customers, while growing and innovating for the future. That’s what we’ve done for 75 years, after all, and that’s what we’ll continue to do for the next 75 (and beyond). Thanks for the part you’ve played in our journey so far, and will continue to play in the future.

Patrick Heath-LayChief Executive Officer

1 August 2016


An introduction to B&CE

Group structure

B&CE Holdings Limited (the Company) was previously named Building and Civil Engineering Holidays Scheme Management Limited until 1 April 2016 when it changed its name in line with the trading activities of the Company going forward. The Company administers The Building and Civil Engineering Charitable Trust (Charitable Trust) and, until 1 April 2016, administered the Building and Civil Engineering Benefits Scheme (Benefits Scheme).

The Company has a number of wholly-owned subsidiaries. B&CE Insurance Limited was established to offer appropriate insurance-based products to all who work in the construction industry. B&CE Financial Services Limited carries out administration services for the pension schemes and financial products operated by B&CE.

The Company is also the sole member of Constructing Better Health (CBH), a national scheme aimed at improving occupational health in the construction industry, and Building and Civil Engineering Benefits Scheme Trustee Limited. It is the sole shareholder of The People’s Pension Trustee Limited, People’s Financial Services Limited and People’s Administration Services Limited. On 1 April 2017, under an intra-group corporate restructure, People’s Financial Services Limited became the intermediate holding company of B&CE Insurance Limited and B&CE Financial Services Limited. Collectively, the Company and all its subsidiaries are referred to as the ‘Group’ or ‘B&CE’ throughout this report.

Who we are

We are a not-for-profit organisation and operate for the benefit of our members and their dependents. Established in 1942 and founded in construction, the products that we currently offer include workplace pensions, employee accident cover and employee life cover. 4.5 million people are members of B&CE schemes, and we provide financial benefits to over 1.6 million contributing members and on behalf of over 65,000 corporate accounts. We manage assets of £4.1bn (information correct as at 31 March 2017).

For over 30 years, B&CE has been providing workplace pensions to employers of all sizes. A particular focus has been to provide solutions to employers with transient, low-to-moderate earning workforces. In 2011 we launched The People’s Pension, a workplace pension that helps employers, big and small and from any industry, meet their automatic enrolment duties. The People's Pension is a simple and flexible solution to automatic enrolment, designed for people, not profit.

Putting our members first has led to our developing award-winning administration, employer support and customer service functions. The People’s Pension was awarded ‘Best Mastertrust' at the Pensions Insight DC Awards 2016, after becoming the first master trust to achieve a Defaqto 5 Star Rating for Auto-Enrolment.

The People’s Pension also won ‘Best Auto-Enrolment Implementation’ at the Pensions Age Awards 2017, ‘Best Master Trust’ at the Corporate Adviser Awards 2017 (and Highly Commended for ‘Best Group Pension Provider’), ‘Best DC Pension Provider’ (for B&CE) and ‘Best DC Master Trust’ at the UK Pensions Awards 2017, and ‘Master Trust Offering of the Year’ at the European Pensions Awards 2017.

B&CE is accredited with the prestigious Investors in People Gold standard, and was chosen as one of The Sunday Times 100 best not-for-profit organisations to work for the second year in a row in February 2017. B&CE was the overall winner for Best Customer Service at the Top 50 Companies for Customer Service awards in 2016, and also won Best Insurance and Financial and Best Medium Call Centre. B&CE was also named Employer of the Year and won the Developing People for Business Success award at the Gatwick Diamond Business Awards.

Group purpose

Founded in construction, we’re a not-for-profit organisation that operates for the benefit of our members – ‘we work for people, not profit’. When we make decisions, we do so with members’ interests at the forefront of our thinking. With over 70 years’ experience (we turn 75 in November 2017), we’re respected experts in providing simple financial products and services that meet people’s needs.

Today, we exist for one simple reason: To make a better life possible for everyone who needs us. That’s true of our financial products and how we help people in the construction industry. This leads to two focal points going forward.

We were created to support construction workers. We made it easier for employers to offer better benefits. From holiday pay, to pensions and insurance. But, as we’ve grown, we’ve realised that other industries face the same challenges as construction. And we’ve seen how our approach to financial services can help in other areas of life, beyond benefits and beyond work.

Today, we exist for one simple reason. To make a better life possible for everyone who needs us. We look for gaps between what the government provides and what employers offer. For where things seem to be designed for the few rather than the many. For where things are too complicated, too expensive or a bit of both.

In every case, we find a way to do it better. And by doing that, we change people’s lives – whether it’s supporting them in their career, helping them stay fit and healthy, or just putting more money in their pocket. We do things differently and this means we can make a real difference.


Our customers can expect us to:

• Create simple products that deliver on our promises

• Provide them with the high-quality simple and hassle-free service and support they have the right to expect

• Listen to them and treat them fairly

• Charge them in a proportionate, fair and transparent way

• Put their interests at the heart of our decision-making.

Our people can expect us to:

• Value and reward them in a clear and visible way

• Provide support to help them develop their careers

• Show them that we care about them and their future

• Engage with them and take action on any issues they raise

• Trust them to deliver quality for customers and colleagues

• Help them to make a difference every day.

Our not-for-profit status means our customers can expect any profit we make to:

• Be re-invested to help us continually improve our products, services, controls and efficiencies

• Be used to fulfil our social responsibility agenda using, where appropriate, B&CE’s Charitable Trust

• Be given back to existing customers through charge discounts, payment holidays or additional services.

Our values

We are a value-driven, not-for-profit organisation that makes a difference to our members.

Creating Simplicity – to make things better

• We are prepared to challenge convention to make things simpler for our members.

• We challenge ourselves to understand our customers inside out, so we can get better.

• We strip out complications and help people understand our products by using plain English.

• We don’t just talk the talk, we walk the walk.

Showing Compassion – to put people first

• We have strong beliefs and values.

• We care about what we do and want to make a difference.

• We look for reasons to pay claims, not reject them.

• We invest time dealing with our customers and being sympathetic to, and understanding of, their personal situation.

• We put ourselves in other people’s shoes.

• We consistently go out of our way to give people time, listen to what they have to say and show we care about how people feel.

• We stay positive whatever challenges are thrown our way.

Financial Services PurposeSimply meeting people's financial needs

"We challenge convention and create simplicity to deliver value for money for our members and make a better life possible

for everyone who needs us."

Construction Services PurposeSimply meeting construction workers' needs

"We focus on the needs of workers, past, present and future to make a

better life possible for everyone who needs us."

Group MissionMake a better life possible for everyone who needs us


An introduction to B&CE (continued)

Our values (continued)

Keeping Promises – to consistently deliver

• We deliver great administration and service – it’s what makes us stand out.

• We manage, meet and exceed the expectations of our customers.

• We approach our work with energy and commitment.

• We move mountains to do what we say we will do.

• Our customers can count on us to deliver at all times, despite any challenges and setbacks.

• We deliver real value.

Corporate social responsibility

At B&CE, our focus has always been on our members and their financial wellbeing is at the core of what we do and how we operate.

Our work in construction

In 1991 we set up the Charitable Trust, a national scheme to relieve hardship and distress in the construction industry. The Charitable Trust provides financial help for people in times of need, perhaps as a result of redundancy or a period of unemployment. The Charitable Trust also provides grants towards education, training and retraining plus grants towards occupational health and safety initiatives. In the past 12 months alone, it provided £275,000 of support.

We plan to extend our Charitable Trust activities, which means continuing to help individuals, while also offering more support to organisations, in the construction industry. Acquiring CBH now means B&CE can give back to construction in more ways by taking forward the important work of strengthening occupational health in the sector.

In addition to the work of the Charitable Trust, B&CE strives to have a positive impact on our industry, local community and on the wider society in which we live and work. We do this by:

Caring about our environment and investing in our local community

At B&CE we look for innovative solutions to create long-term value and sustainable business. Finding ways to have a positive impact on the environment through energy savings is just one way we do this. We also support local community projects and take part in fundraising activities to help local charities, including our charity of the year which is chosen by our people.

Putting people first

We’re for people, not profit so we stay focused on people’s needs. That means putting the needs of our members at the heart of our business as well as recognising and rewarding our people in a clear and visible way.

B&CE is an ‘equal opportunities employer’, which means we are committed to treating all our people, and those who apply for a role at B&CE, equally.

Being open and clear in everything we do

We gain trust by acting fairly, with integrity and by being transparent. The Financial Conduct Authority’s ‘Treating Customers Fairly’ initiative is central to B&CE’s culture. We are open and honest and explain things in simple terms, supported by our corporate membership of the Plain Language Commission. We’re committed to first class customer service, promise to listen carefully, be fair and respond in good time.

B&CE’s products – construction services

CBH

Purchased in April 2016, CBH is a national scheme for the management of occupational health in the construction industry.

B&CE’s products – financial services

The People’s Pension

Workplace pension law changed in October 2012 and from that date, employers began to be required to automatically enrol certain workers into a qualifying workplace pension scheme (automatic enrolment). These duties are being phased in between 2012 and 2018 and from April 2018, the contributions payable by employers and employees will begin to increase. By 2019, those enrolled will be required to pay 5% of their qualifying earnings into a qualifying scheme (unless they choose to opt out), with a further 3% coming from their employer.

B&CE launched The People’s Pension as an automatic enrolment solution. It is a multi-employer occupational pension scheme and became operational from October 2012. The People’s Pension has a concise range of investment options, a flat-rate annual management charge (AMC) of 0.5% per annum and it is available to employers from any sector, regardless of size.


The People’s Pension has a 5 Star rating for Auto-Enrolment by Defaqto, recognising it as a quality automatic enrolment pension scheme. It was the first master trust to achieve voluntary master trust assurance – demonstrating its continued commitment to strong governance. This is an independent assessment which demonstrates the strength of the scheme’s governance and administration standards. The Institute of Chartered Accountants in England and Wales (ICAEW) developed the framework in partnership with The Pensions Regulator (TPR), which employers can use to find a scheme that has been independently reviewed against the framework’s defined set of objectives.

The People’s Pension Trustee Limited acts as corporate trustee for the scheme and B&CE Financial Services Limited is the appointed administrator.

EasyBuild

In April 2001, B&CE launched EasyBuild, a stakeholder pension scheme for those who work in the construction industry. Members of EasyBuild are charged an AMC which is tiered, depending on the member’s fund size, and ranges between 0.60% and 0.95% per annum.

EasyBuild is insured by B&CE Insurance Limited. It was self-administered until 1 April 2015 when the administration was transferred to B&CE Financial Services Limited.

Employee Accident Cover

B&CE launched Employee Accident Cover (EAC) in October 2010. Under EAC, employers pay weekly premiums to provide cover for their employees who are covered for a range of injuries following an accident at work, or travelling to or from work.

EAC is insured by B&CE Insurance Limited. It was self-administered until 1 April 2016 when the administration was transferred to B&CE Financial Services Limited.

Employee Life Cover

Also in October 2010, B&CE launched Employee Life Cover (ELC). ELC is a death benefit only occupational pension scheme. Employers pay weekly premiums to provide cover for their employees. The cover provides a tax-free lump sum, with the beneficiaries chosen at the discretion of the corporate trustee. The standard lump sum payable is currently £32,500 and the benefit doubles if the death is the result of an accident at work, or whilst travelling to or from work. The product also includes death cover for employees incapacitated or unemployed prior to their State Pension age.

Building and Civil Engineering Benefit Scheme Trustee Limited acts as corporate trustee to the scheme and B&CE Financial Services Limited is the administrator.

TUTMAN B&CE Contracted-out Pension Scheme

The TUTMAN B&CE Contracted-out Pension Scheme (BCECOPS) was launched in 1988. It is an authorised unit trust and non-UCITS (Undertaking for the Collective Investment in Transferable Securities) scheme. It is also a personal pension plan that helped employed construction workers build up their savings to provide an income in retirement by contracting-out of the State Earnings Related Pensions Scheme (SERPS) and later, the State Second Pension. Under the scheme, a member elected for part of their own and their employer’s National Insurance contributions to be paid into their own pension arrangement. The government stopped contracting out for defined contribution schemes from 6 April 2012. We will continue to look after the scheme on behalf of our deferred membership.

Thesis Unit Trust Management Limited (TUTMAN) is the scheme manager and B&CE Financial Services Limited is the scheme administrator and scheme registrar.

Building and Civil Engineering Benefits Scheme

The Building and Civil Engineering Benefits Scheme is an approved occupational pension scheme, paying one-off tax-free lump sums when members reach the age of 65, or at a reduced rate from age 60 or earlier in cases of incapacity. It was established in 1982 and was closed to new members and future accruals in April 2001. Accrued entitlements continue to be paid when due.

Building and Civil Engineering Benefits Scheme Trustee Limited acts as corporate trustee for the scheme. It was administered by B&CE Holdings Limited until 1 April 2016 when the administration was transferred to B&CE Financial Services Limited.

RapidCash

RapidCash was launched in 1997. It is a low cost injury insurance product designed specifically for the construction industry. Should a policy holder suffer a qualifying injury they can, subject to meeting the policy terms and conditions, receive pay-outs of up to £300 per week. RapidCash is not currently promoted but enquiries are still received from existing customers and employers.

RapidCash is insured by B&CE Insurance Limited. It was self-administered until 1 April 2016 when the administration was transferred to B&CE Financial Services Limited.



Directors

The following served as Directors of B&CE Holdings Limited during the year, and up to the date of signing of the financial statements, unless otherwise stated. The attendance at Board meetings between 1 April 2016 to 31 March 2017 is shown for each Director.

Chandrasekhar Ramamurthy

Independent Chairman

Attendance 6/6

Bob Blackman MBE

Industrial Employee Representative

Nominated by Unite the Union (Unite)

Attendance 6/6

Geoff Lister CBE

Employer Representative

Nominated by Federation of Master Builders (FMB)

Attendance 3/3 Resigned 15 Nov 2016

Peter Rogerson OBE


Nominated by Build UK

Attendance 1/3 Resigned 15 Nov 2016

James Gilmour

Employee Representative

Nominated by Federation of Master Builders (FMB)

Attendance 2/2 Joined 7 Feb 2017


Keir Greenaway


Nominated by GMB

Attendance 5/6

James O’Callaghan OBE


Nominated by Civil Engineering Contractors Association (CECA)

Attendance 5/6

Brian Rye



Attendance 4/6

John Spanswick CBE


Nominated by Build UK

Attendance 4/6

John Allott



Attendance 6/6

Harry Frew



Attendance 5/6

David Smith


Nominated by Scottish Building Federation (SBF)

Attendance 6/6

Stephen Terrell


Nominated by National Federation of Builders (NFB)

Attendance 6/6



Senior Management Team

The day-to-day operation of B&CE is the responsibility of the Senior Management Team. The following are the current members of that team:

Patrick Heath-Lay

Group Chief Executive Officer

Zoe Wright

Director of People and Premises

Jamie Fiveash

Chief Strategy and Marketing Officer

Matthew Phillips

Director of Risk and Regulatory Compliance


Sam Stedman

Director of Finance

Mark Plant

Director of Strategic Delivery

Roy Porter

Director of Business Development

Darren Philp

Director of Policy and Market Engagement

Cliff Ratcliffe

Director of IT

Company Secretary and Registered OfficeLydia Harratt B&CE Holdings LimitedManor Royal, CrawleyWest Sussex RH10 9QP

BankersHSBC Bank plc9 The BoulevardCrawleyWest Sussex RH10 1UT

Independent auditorsPricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsThe Portland Building25 High Street, CrawleyWest Sussex RH10 1BG

SolicitorsCMS Cameron McKenna Nabarro Olswang LLP (CMS)Cannon Place78 Cannon StreetLondon EC4N 6AF

Kevin Martin

Acting Director of Operations

Michael Mann

Director of Digital Transformation


Strategic report

The Directors present the Strategic report of B&CE Holdings Limited for the year ended 31 March 2017.

The business model

The Group’s activities are focused on delivering positive outcomes for all of our members and the employers that use our schemes. We seek to design quality products that meet the needs of our members. Some of our products are specifically designed for the construction industry, while others are open to all.

Details of the Group’s purpose, vision, beliefs and values can be found in the section ‘An Introduction to B&CE’ of this Annual report.

Principal activities

The Group provides the financial benefits listed on page 8.

The People’s Pension is currently the primary focus in terms of the Group’s resource. Through The People’s Pension, we believe automatic enrolment provides a platform to help us build a better future for all of our members.

The Group also continues to operate group accident and life schemes, and an occupational health scheme for the construction industry as well as a number of legacy pension schemes.

Key performance indicators

The Group’s strategy is underpinned by focusing on a number of key performance indicators (KPIs). The Senior Management Team and representatives of the Board review KPIs on a regular basis.

The main focus for the Group in recent years has been to build scale within B&CE’s pension schemes. There were 3,222,019 members in EasyBuild and The People’s Pension (combined) as at 31 March 2017 (2016: 2,454,231), of which 1,508,491 were actively making contributions (2016: 1,166,609).

As well as building scale, we are also committed to continuing to deliver the highest level of service despite an increase in customer numbers. All our people work to rigorous service level agreements (SLAs) to ensure we maintain our high levels of service. We are proud of our service record, with less than 0.023% of total members making complaints during the year. Although 738 complaints were received during the year (2016: 630), this was anticipated given the increased number of customers.

Business update and future developments

The People’s Pension

Over the last 12 months The People’s Pension has continued to grow at a remarkable pace, thanks largely to thousands of small employers trusting us to support them by delivering their workplace pension scheme. Our focus from a business perspective has been to increase our scale in terms of membership and assets under management while continuing to deliver high quality service and support.

As at 31 March 2017, we had 2,749,566 members in The People’s Pension (2016: 1,972,337), representing 48,551 transacting employers (2016: 17,218). That equates to £1,954m in assets under management (2016: £949m). The number of new employers remained high despite the introduction in late 2015 of a one-off set-up charge for new employers.

Over seven million people in the UK are now saving for their future thanks to automatic enrolment, many for the first time. Opt-out rates are still low, although are expected to rise once contribution rates increase. The programme has been successful so far. But there are a number of challenges to come.

We will shortly see greater master trust regulation thanks to the Pensions Bill. This will create new challenges for pension providers – largely welcome ones from our perspective, as this has needed tackling for some time. We are likely to see a period of consolidation in the master trust market. We are ready to step in to help schemes which wish to leave the market to ensure that savers, and their savings, are adequately protected.

While more than half of eligible workers are now saving, there are still a huge number of employers still to stage between now and the end of 2018. This group are less likely to have access to pensions expertise than the larger employers that have already staged, so need a supportive provider on their side. We’ve designed our automatic enrolment proposition to meet their needs, and ensure that everyone we work with has access to high quality service and support when they need it.

We have increased our resourcing over the last 12 months to make sure our standards stay high despite increased demand for our services. We know that they have, because we’ve continued to receive high profile industry awards for the scheme. And we’ve also been awarded Best Overall Customer Service in the Top 50 Companies for Customer Service list, beating household names both inside and outside financial services.

Accident and life

Membership in the ELC and EAC offerings has continued to fall but at a slower rate than in previous years. The number of individuals covered by ELC and EAC has reduced in the year to 134,678 (2016: 138,132).


Legacy schemes

While they may no longer be growing, our legacy schemes (and the members still in them) really matter to us, and are still a major focus of our work. The current membership in these schemes is 1.6 million which equates to assets under management of £2bn.

We want to make sure that all our customers, regardless of their product, receive the best possible value for money. That’s why earlier this year we took the decision to move the members of EasyBuild, our legacy stakeholder pension scheme for the construction industry, into The People’s Pension. They will be moved to The People’s Pension later this year, after which they will pay less for us to manage their money, but will still have access to the same award-winning customer service. The current membership of EasyBuild is 472,453 (2016: 481,894) with assets under management of £1bn (2016: £1bn).

We also continue to provide administration services for the Building and Civil Engineering Benefits Scheme and the TUTMAN B&CE Contracted-Out Pension Scheme – both of which are in run off. The sizes of these schemes at the end of the year were £708m (2016: £683m) and £236m (2016: £221m) respectively.

In total £144m was paid out from B&CE’s pension schemes to members over the 12 months (2016: £131m).

Construction

Our roots are still very firmly in construction, where we started out 75 years ago. And it remains a big focus for B&CE as a business.

That’s why we now have a dedicated Construction Services team, set up to further increase focus on that side of the business. We now have a dedicated marketing and communications team to support construction activities, and a Director of Construction Services to provide strategic leadership. We’ve also seconded an experienced Head of Occupational Health from Balfour Beattie to head up our work in this area.

Following our takeover of CBH (a national scheme for the management of occupational health in the construction industry) in 2016, we’ve been developing a new model which better meets the needs of the sector. We’ve already carried out extensive research and played that back to the construction industry, and are working towards launching our new approach sometime in 2018.

Over the last year we’ve continued to expand the activities of our Charitable Trust, set up to give back to the construction sector. Over the last year the Trust has given out grants worth £278,510 (2016: £212,940) to 17 organisations and over 70 individuals to cover the cost of anything from a training programme for construction workers to funeral expenses.

We have continued to support the Charitable Trust by providing dedicated resources, including staff. No donations were made to the Charitable Trust during the year, given that it already has sufficient assets to meet its needs in the short term (2016: £nil). However, the Company has agreed to donate a further £500,000 by 31 March 2019 if it becomes needed by the Charitable Trust.

Future developments

We expect The People’s Pension to continue to grow over the next 12 months, in terms of members, employers served and assets under management.

We’ll make sure that we’re ready to tackle future challenges in the automatic enrolment space – including any changes sparked by the 2017 government review into the programme which expands coverage to more savers (including, potentially, part-time workers and the self-employed).

We’ll also continue to ready ourselves to support master trusts looking to leave the market, to ensure that their members do not see their savings affected by schemes closing.

And we’ll continue to work on our digital offering, to make sure that our customers can engage with us when, where and how they want to – alongside looking at how we might expand our product range to offer additional support to our customers and their families.

But it isn’t all about pensions. Another big focus moving forwards will be our new occupational health model for the construction industry, which is currently in development. We’ll also continue growing the work of our Charitable Trust.

Financial review

The consolidated Group financial statements are shown on pages 25 to 29. The consolidated profit for the year was £7.5m (2016: £6.6m loss). The main variances compared to last year are as follows:

• Revenue for the year totalled £30.7m (2016: £17.7m):

• Scheme administration fees totalled £21.4m for the year (2016: £9.2m). This increase was due to income from The People’s Pension increasing significantly during the year given the rapid growth in the assets under management and the full year effect of the one-off set-up charge for employers.

• Revenue from insurance business increased to £9.3m (2016: £8.5m). EasyBuild fees increased as a result of increased funds under management driven by strong investment performance during the period.


Strategic report (continued)

Financial review (continued)

• Net operating expenses increased to £30.0m (2016: £24.0m):

• Net operating expenses (excluding movements in long-term insurance provisions) have increased to £30.0m (2016: £24.4m). Operating costs have increased significantly, driven by the need for additional staff to service the greatly increased customer base. Other costs have also increased as a result of this growth, such as communication costs and regulatory levies.

• Insurance business provisions increased by £0.1m (2016: £0.4m decrease). The relatively large decrease in the previous year was primarily due to the release of provisions following the transfer of the administration of EasyBuild to B&CE Financial Services Limited from 1 April 2015.

• Gains from financial instruments totalled £7.1m (2016: £0.6m losses):

• Realised profit on financial instruments totalled £5.1m (2016: £1.4m) which arose from a change to the investment strategy with the sale of the assets managed by Smith and Williamson Investment Management Limited from which the proceeds were used to purchase units in funds managed by Legal and General Investment Management Limited.

• Unrealised gains on financial instruments totalled £0.9m for the year (2016: £5.5m losses).

• The total tax charge for the year was £0.4m (2016: £0.2m credit).

• The total comprehensive income for the year was £5.8m (2016: £7.9m loss). The main variance (other than those already mentioned) was due to unrealised losses on investments of £1.7m (2016: £1.5m).

The financial stability of the Group has improved during the year with the total available resources of the Group increasing to £132.7m (2016: £111.3m), as shown on page 56.

The Group’s operating expenses have increased during the year and are expected to increase further to support the growth of The People’s Pension. The income that the Group is expected to receive, from the operation of its schemes – in particular The People’s Pension – is expected to be sufficient to repay this additional expenditure in the long term.

The costs of operating The People’s Pension are borne by B&CE Financial Services Limited, which is the appointed administrator of the scheme. An administration fee is levied in respect of this service – although to date the fee has been significantly lower than the costs incurred.

B&CE Financial Services Limited has not required additional funding from the Company during the year (2016: £9.0m) due to the increased income from the set-up fee levied against new employers joining The People’s Pension. This levy is expected to continue to generate significant income for the next 12 months. The Group is committed to providing funding support to B&CE Financial Services Limited if required.

Risk management

Risk management framework

Our risk management process is closely aligned to our strategy. The process facilitates the identification of risks through workshops and interviews with managers and senior managers. A risk that can seriously affect our ability to achieve strategic objectives, performance or reputation are maintained in the Group or business unit risk registers. Our risk management process is operated throughout the Group.

Risks are assessed to determine the potential impact and likelihood of occurrence, after taking into account key controls and mitigating factors. Additional mitigating actions are identified and agreed with the relevant business owners.

Risks are managed at the Group level or within the business unit on an ongoing basis with follow up and challenge by the Risk Management function throughout the year. At the Group level, each risk has an executive owner. The Chief Executive Officer has overall accountability for the control and management of risk. The Board has overall responsibility for risk management.

The content of the Group Risk Register is considered and discussed through regular meetings with senior management and reviewed by the Executive Committee, Group Audit and Risk Committee and the Board.

Principal risks and uncertainties

We have performed a robust and systematic review of those risks that we believe could seriously affect our ability to achieve strategic objectives, performance or reputation. While the types of risk to which the Group is exposed to have not changed significantly over the year, the acquisition of CBH has increased our exposure to operational risks that could have an impact on our reputation.

The risks identified do not comprise all of the risks associated with our business and are not set in priority order. Additionally, risks not presently known to management or deemed to be less material, may also have an adverse effect on the business.

15


Risk description Mitigation

Operational risk

Legal and regulation

The Group operates in a highly regulated environment and is subject to a variety of complex, demanding and evolving legal and regulatory requirements.

Changes in law and regulation can have a significant impact on our operating model – both positive and negative. We are currently in a period of significant regulatory change, particularly in the pensions industry.

a. We actively engage with regulators and government bodies, often with our stakeholders, to support and develop the industry and the interests of our members. Changes can significantly impact demand for our products, the types of products we offer and the amount of capital we need to hold.

b. We maintain good governance practices and are active in monitoring potential future developments.

c. We undertake regular reviews to ensure compliance and that training needs are addressed as required.

Operational risk

IT Systems and infrastructure

The Group is reliant on its IT systems and operational infrastructure in order to operate efficiently. Inadequate systems or failures of key systems could have a significant impact on our business

a. We have extensive controls in place to maintain the integrity and efficiency of our systems including detailed recovery plans in the event of a significant failure.

b. New innovations and upgrades to systems are ongoing to improve both the customer experience, our efficiency and security.

c. We ensure that prior to introducing system change robust testing is completed.

Operational risk

Business continuity and major incident response

The Group could be exposed to a major incident or event that could impact on our ability to operate.

a. We have detailed plans in place, supported by senior management who are trained in dealing with major incidents and have the authority to make decisions in the event of a potentially disruptive incident.

b. We have a Business Continuity team who can be convened at short notice to manage the response and any associated risk to the business.

c. We maintain backup sites which would be made available within pre-defined timescales and are regularly tested.

Operational risk

People engagement, recruitment, retention and capability

The Group employs over 450 people who are critical to the success of our business.

Attracting and maintaining good relations with talented people and investing in training and development is essential to the efficiency and sustainability of our operations.

a. We maintain employment policies and remuneration and benefits packages are regularly reviewed as well as providing our people with fulfilling career opportunities.

b. We regularly monitor and review performance and feedback.

c. We undertake ongoing reviews to understand the nature of capability and specific skill sets required to deliver objectives.

We consider the following to be our principal risks:



Statement of internal control

The system of internal controls is designed to manage and minimise the risk of failure to achieve the overall business objectives. In pursuing these objectives, internal controls can only provide reasonable and not absolute assurance against material misstatement or loss. These controls include financial, operational and compliance controls, as well as risk management.

The Board monitors the key element of the internal control framework throughout the year and has overall responsibility the system of internal control.

The Group has established the Group Audit and Risk Committee, the committee typically meets four times a year and is responsible for maintaining oversight of the control environment within the Group.

This committee currently consist of three Non-Executive Directors and two Independent Non-Executive Directors and is chaired by an Independent Non-Executive Director. The Chief Executive Officer and the Director of Risk and Regulatory Compliance also attend the meetings of this committee.

Risk description Mitigation

Strategic risk

Business strategy

There is a risk that the Group could fail to communicate or implement its strategies effectively. Risks to delivering the strategy need to be properly understood and managed to deliver long-term growth.

a. We have a clear focus in place to deliver our Growth, Financial strength and Customer satisfaction vision.

b. We monitor progress against these areas of focus and risks to delivery, these are regularly reviewed by the Executive Committee and Board.

c. We ensure that the strategy is communicated and understood by all our people on a continual basis.

Operational risk

Change Management

There is a risk that deploying such a wide range of initiatives required to meet our strategic objectives may create a high level of disruption to the delivery of day to day operations.

Failure to manage or deliver on time and to quality on our key projects could result in significant reputational damage and costs.

a. We have a suite of mitigations that are in place to ensure successful delivery of our key strategic programmes with leaders throughout the business frequently monitoring the delivery and impacts of strategic programmes.

b. We have a targeted recruitment approach to key staff within project delivery teams and senior management, together with ongoing and focussed training of staff to strengthen the ability to manage and deliver projects.

c. Our senior leaders are well experienced in delivering key strategic programmes successfully.

Financial risk

The main financial risks which have been assessed on the basis of their potential impact on our Statement of financial position are:

• Insurance risk

• Market risk

• Credit risk; and

• Liquidity risk.

a. We operate an enterprise wide risk management framework. The principal financial risks relating to our Group and associated mitigations are set in Note 24 to the financial statements.

b. Financial projections are produced and reviewed on a regular basis by the Board. As well as forecasting under a set of central assumptions, stressed scenarios are produced, and the Group is well placed to withstand even relatively severe adverse conditions.

Risk management (continued)

Principal risks and uncertainties (continued)


During the year the Group Audit and Risk Committee has reviewed the Group’s system of internal controls on behalf of the Board. The Committee’s work has included:

• Reviewing reports from the Group’s risk management function on the risks facing the Group, along with any related, agreed actions

• Reviewing the internal audit work plans and results

• Meeting with the Chief Executive Officer and the internal and external auditors to discuss the system of internal controls and any material weaknesses reported

• Discussing with the Company’s Senior Management Team the actions required to address any potential problem areas identified by Board members or in the audit reports

The Group Audit and Risk Committee has also reviewed the effectiveness of the risk management process and any significant potential risk issues have been referred to the Board for consideration.

The Board, through the Group Audit and Risk Committee, has reviewed the Internal Audit function’s reports on the Group’s systems of internal controls for the year ended 31 March 2017, and no significant weaknesses have been reported.

Charitable activities

B&CE continues to give back to the construction sector through its Charitable Trust which paid out over £275,000 to a number of different organisations and individuals in 2016/17.

In addition to that, we choose a ‘Charity of the Year’ each year. Our staff choose one organisation from a shortlist of local charities, which helps them feel engaged in supporting it from the start.

Our charity for 2016/17 was Springboard Project, a community based charity that provides inclusive play and leisure opportunities for families with young children and fun short breaks for children and teenagers with disabilities.

We held bake sales, raffles, a Halloween party and a quiz night (amongst other things). We raised over £3,400 for Springboard Project during the year, and also got our hands dirty doing some painting and decorating for them.

This year, we’ll be sponsoring (in time and money) a community project in Crawley to mark our 75th birthday. We’ve selected to renovate Dormans community centre based in Gossops Green. It’s home to Crawley Community Youth Services, their aim is to, ‘encourage young people to be positive role models who can create engaged, vibrant and equal communities throughout Crawley’.

We also support individual employees with a donation where they have chosen to take part in charity or fundraising events and challenges.

We also sponsored the 2017 ‘Heart FM’ Easter Egg Appeal, through which over 2,000 eggs were donated to 18 local children’s charities.

Employees

At the year end, the Company had 436 employees (2016: 333), an increase of 31% over the year. Of our employees, 236 employees (54%) are female and 200 employees (46%) are male, while 388 employees, 89% of our workforce, are full-time and 48 employees (11%) are part-time.

We recognise that attracting and retaining good people is integral to delivering great performance and superior customer service. In 2016, B&CE gained the ‘Investors in People Gold Award’ and in early 2017 we made it into The Sunday Times 100 Best Not-for-Profit Organisations to Work For list for the second year in a row. B&CE was also named Employer of the Year at the Gatwick Diamond Awards (held in March 2017) where we also won the Developing People for Business Success award.

Organisational development

The Group continues to expand. We’re now working across two sites at opposite ends of the same road – giving our employees a brisk 10 minute walk between sites for meetings (although we do supply company bicycles for those who don’t fancy the walk).

We believe in developing our organisation by developing the skills of our staff at all levels. We’ve developed a Simply Talent programme. It’s designed to give people the opportunity to move to roles in the organisation for which they have the potential – even if they don’t have the qualifications or experience they might usually need right from the start. We’ve also got a full management development programme and a strategic leadership programme for senior managers.

All our managers take part in 360 degree feedback – and the results of this programme are used to develop them further within their teams, as well as drive our management development training.

This year, we launched a new employee engagement survey. With 90% of employees taking part in the survey, we are pleased to see that 79% say they are proud to work at B&CE. In addition to this, 71% would recommended B&CE as a great place to work, and 71% feel motivated to do more than is required of them.

Equal opportunities

We are an equal opportunity employer and are fully committed to a policy of treating all employees and job applicants equally.



Employees (continued)

Equal opportunities (continued)

We take all reasonable steps to employ, train and promote employees on the basis of their experience, abilities and qualifications without regard to race, nationality, national origin, ethnic origin, colour, religion or belief, sex, sexual orientation, gender reassignment, age, marital or civil partnership status, disability, pregnancy or maternity or offending background.

We also take all reasonable steps to provide a work environment in which all employees are treated with respect and dignity and that it is free of harassment. The Company will not condone any form of harassment, whether by employees or third parties that do business with B&CE.

Disability

Applications for employment by disabled persons are always fully considered, bearing in mind the respective aptitudes and abilities of the applicant concerned. If an employee were to become disabled, every effort would be made to ensure that their employment with the Group continues and that the appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of a disabled person should, as far as possible, be identical to that of a person who does not suffer from a disability.

Reward and recognition

We reward our people for their hard work and dedication.

Our values – Creating Simplicity, Showing Compassion and Keeping Promises – are at the heart of everything we do as a business, and our people policies and practices are no different.

We have a Values Vouchers scheme, where managers are able to reward anyone (whether in their team or not) for showing behaviours that go above and beyond the values we expect. We also issue Values Awards, and have an Employee of the Year scheme. We do a number of desk drops and small gifts during the year and give our people a small gift voucher to say thank you at Christmas.

B&CE is a Living Wage Employer, which means we’re committed to rewarding a hard day’s work with a fair day’s pay. We include all our apprentices in this initiative, and ensure our contractors support this too.

We offer a range of employee benefits including an onsite gym and free gym instruction, mini health checks, annual flu jabs, massages, a subsidised staff restaurant, free fruit, an online employee discount portal, taxi to town and a travel incentive scheme to reward our people for using public transport to travel to work. Employees can also choose from a range of additional benefits including will-writing and Westfield Health. All our people also have access to a range of perks and discounts from some of the UK’s biggest brands – via Perkbox.

Communication

B&CE continues to ask employees what they think about working at B&CE. We do this through surveys, pulse checks, quarterly newsletters, team briefs, focus groups, staff presentations, knowledge sharing, the intranet and a dedicated ‘ask the CEO’ mailbox. Our CEO holds face-to-face updates with employees on a quarterly basis. We also hold breakfast sessions where employees share their thoughts and ideas with senior management.

We have recently invested in a new company intranet, Grapevine, which is the primary source of information and updates for our people.

Learning and development

We are committed to learning and development at all levels of B&CE.

In 2016/17 we delivered more than 3,800 hours of internal training, and 517 employees attended external courses. We also launched a new online learning system, Simply Learn, on our new intranet Grapevine. This allows staff to explore a number of different areas without substantial cost – maximising their development. We also have an extensive online mandatory training programme including anti-money laundering and Treating Customers Fairly (TCF), amongst other things.

Management development, increasing employee engagement activities and maintaining our professional and regulatory standards remain a key focus as the organisation prepares for the future. Our management development programme ensures our managers continue to build on their key management skills in line with our overall business objectives, and we also have a special development programme for senior managers designed to build on their strategic leadership skills.

Business ethics

We aim to keep standards of business conduct at the forefront of our employees’ day-to-day work. A big part of this is our extensive Acceptable Use Policy, which brings together various IT, data protection and confidentiality policies into one easily accessible policy and reference guide.

B&CE is an equal opportunities employer and, as such, opposes all forms of unlawful and unfair discrimination. The Company believes that everybody has the right to be treated fairly and with dignity and respect. Continuing our commitment to equality, we undertake annual mandatory training for all staff on equal opportunities and diversity.

By order of the Board,

Chandrasekhar (Babloo) Ramamurthy Chairman 1 August 2017


Directors’ report

The Directors present their report and the audited financial statements of the Group and the Company for the year ended 31 March 2017.

Directors

The Directors who held office during the year and up to the date of signing this report are shown on pages 9 and 10.

There were six Board meetings during the year and the average attendance by Directors was 85%.

Directors’ and officers’ liability insurance

The Directors have the benefit of an indemnity which is a qualifying third-party indemnity provision as defined by section 234 of the Companies Act 2006. The indemnity was in force during the year and also at the date of approval of the financial statements.

Corporate governance

The Company’s Board is made up entirely of Non-Executive Directors with half representing construction employer federations and half representing trade unions, together with an independent chairman. This unique governance structure is designed to ensure that decisions taken are in the best interests of B&CE’s members. The subsidiary company boards are made up of Directors from the main Board, Executive Directors and Independent Non-Executive Directors with financial services expertise.

There are also three sub-committees which report into the main Board. The Group Audit and Risk Committee, the Investment Committee and the Remuneration and Nominations Committee all meet on a quarterly basis. A Solvency II Committee was also established on a temporary basis until the implementation of the new regulatory regime for insurance companies which was introduced in January 2016.

Corporate governance is of great importance to B&CE. We aim to satisfy the principles of ‘good governance’ and comply with the requirements of the Companies Act and, where practical, the UK Corporate Governance Code, by ensuring there’s transparent and effective decision making process in place. Regular reviews of the effectiveness of the Board as a whole and the Directors are conducted, based on detailed questionnaires and individual interviews, with agreed actions for best practice being implemented.

All Directors have access to the services of the Group Company Secretary. They aim to ensure that corporate governance processes and best practice are followed, there are good flows of information within and to the Board and its sub-committees and they also assist with the induction and development of the Board, as required.

Health and safety

The Group recognises its responsibility to its employees, visitors and contractors to provide and maintain safe and healthy working conditions, equipment and systems of work and to provide such information, instruction, training and supervision as needed. The Group has policies and procedures in place to ensure that it complies, so far as is reasonably practicable, with the requirements set out in the Health and Safety at Work Act 1974 and all other associated legislation, and has appointed internal and external competent persons to act on its behalf in this respect.

Future developments

An indication of likely future developments in the business of the Group is given in the Strategic report.


Directors’ report (continued)

Financial risk management

The Group’s operations expose it to a variety of financial risks, disclosed in further detail in Note 24 to the financial statements. That includes the effect of the following:

Credit risk

B&CE Insurance Limited has two reinsurance arrangements in place. These arrangements expose B&CE Insurance Limited to the risk that the reinsurers will be unable to pay amounts in full when due. The Group actively monitors this risk by reviewing their credit rating against other reinsurers in the market.

The Group’s transactions in sterling cash deposits, investments and trading with customers expose it to the risk that the counterparty may not repay the amounts owed. For sterling cash deposits and investments, the Group only deals with a list of highly-rated United Kingdom counterparties to reduce the risk that the counterparty will not repay the deposit.

Liquidity risk

Financial instruments held by the Group include on demand sterling cash deposits and investments designed to ensure the Group has sufficient available funds for operations.

The terms of the policies written ensure B&CE Insurance Limited is not committed to making payments to unit policyholders before the corresponding money is collected from the reinsurers.

Interest rate risk

The Group invests its surplus funds in investment funds which may hold a proportion of interest bearing assets. Changes in the interest rates may result in income increasing or decreasing. However, the Group is not reliant on interest receivable for its income. The Group’s investments include unit trusts which are partially affected by interest rate volatility.

Market risk – Price risk

The Group is exposed to equity securities price risk because of investments held by the Group and classified on the Group Statement of financial position either as available for sale or at fair value through profit and loss. The Group is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group’s Investment Committee.

Foreign exchange risk

Given the nature of the Group’s operations, no significant exposure to foreign exchange risk exists.

Insurance risk

The Group is exposed to insurance risk through the insurance contracts written by B&CE Insurance Limited. The Group’s exposure is relatively low and the Group is not currently looking to increase exposure in this area.

Auditor objectivity

The Group has a policy that if PwC is required to provide any non-audit services to the Group, PwC will give a written assurance that such work is treated as totally independent from that associated with the normal audit work. This will safeguard their objectivity.

Events after the reporting period

On 1 April 2017, under an intra-group corporate restructure, People’s Financial Services Limited became the intermediate holding company of B&CE Insurance Limited and B&CE Financial Services Limited.


Statement of Directors’ responsibilities in respect of the financial statements

The Directors are responsible for preparing the Annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the group and company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group and company for that period. In preparing the financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• state whether applicable United Kingdom Accounting Standards, compromising FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006.

The Directors are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

In the case of each director in office at the date the Directors’ report is approved:

• so far as the Director is aware, there is no relevant audit information of which the group and company’s auditors are unaware; and

• they have taken all steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the group and company’s auditors are aware of that information.

By order of the Board,

Lydia Harratt Company Secretary 1 August 2017

Company number: 00377361


Independent auditors’ report to the members of B&CE Holdings Limited

Report on the financial statements

Our opinion

In our opinion, B&CE Holdings Limited’s group financial statements and company financial statements (the “financial statements”):

• give a true and fair view of the state of the group’s and of the company’s affairs as at 31 March 2017 and of the group’s profit and cash flows for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

What we have audited

The financial statements, included within the Annual report and financial statements (the “Annual Report”), comprise:

• the Group and Company Statement of financial position as at 31 March 2017;

• the Consolidated statement of comprehensive income for the year then ended;

• the Consolidated statement of cash flows for the year then ended;

• the Group and Company Statement of changes in equity for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements is United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law (United Kingdom Generally Accepted Accounting Practice).

In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.

In addition, in light of the knowledge and understanding of the group, the company and their environment obtained in the course of the audit, we are required to report if we have identified any material misstatements in the Strategic report and the Directors’ report. We have nothing to report in this respect.

Other matters on which we are required to report by exception

Adequacy of accounting records and information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or

• the company financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Directors’ remuneration

Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.


Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Statement of directors’ responsibilities in respect of the financial statements set out on page 22, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the group’s and the company’s circumstances and have been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the directors; and

• the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. With respect to the Strategic report and Directors’ report, we consider whether those reports include the disclosures required by applicable legal requirements.

Michael Jones (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Gatwick

1 August 2017


Consolidated statement of comprehensive income for the year ended 31 March 2017

2017 2016 Note £000 £000

Revenue 2 30,694 17,688

Net operating expenses 3 (30,042) (24,015)

Gains / (losses) from financial instruments 2 7,086 (588)

Profit / (loss) before interest and taxation 4 7,738 (6,915)

Finance income 2 143 87

Profit / (loss) before taxation 7,881 (6,828)

Tax (charge) / credit on profit / (loss) 7 (420) 243

Profit / (loss) for the financial year 7,461 (6,585)

Other comprehensive loss for the year

Revaluation of financial instruments 11 (1,721) (1,538)

Actuarial gain on pension scheme 115 141

(1,606) (1,397)

Total tax on components of other comprehensive income

(47) 54

Other comprehensive loss for the year, net of tax (1,653) (1,343)

Total comprehensive income / (loss) for the year 5,808 (7,928)

All of the Group’s financial activities are continuing. The Company applies the exemption available in section 408 in the Companies Act 2006 and does not present the Company’s profit and loss account for the year.

B&CE Holdings Limited Annual report and financial statements for the year ended 31 March 2017 |

Group Company

2017 2016 2017 2016 Note £000 £000 £000 £000

Scheme administration Non-current assets

Intangible assets 9 203 - - -

Tangible assets 10 4,611 4,142 4,609 4,142

Financial instruments – available for sale 11 18,186 29,655 14,175 25,118

Investments in subsidiaries 12 - - 89,050 89,050

23,000 33,797 107,834 118,310

Current assets

Trade and other receivables 13 11,362 7,022 4,892 1,936

Cash and cash equivalents 14 24,233 14,318 16,023 7,601

35,595 21,340 20,915 9,537

General and long-term insurance

Financial instruments – fair value through profit or loss 11 64,362 60,300 - -

Assets held to cover linked liabilities 547 459 - -

Reinsurers share of technical provisions 1,048,963 903,567 - -

Trade and other receivables 13 940 2,597 - -

Cash and cash equivalents 14 9,717 4,888 - -

1,124,529 971,811 - -

Total assets 1,183,124 1,026,948 128,749 127,847

Scheme administration

Trade and other payables – amounts falling due within one year 15 14,432 10,008 10,234 7,627


Long-term business provision 16 117 127 - -

Technical provision for linked liabilities 1,049,495 904,011 - -

Provision for other risks 17 128 152 - -

Trade and other payables – amounts falling due within one year 15 1,788 1,294 - -

Total liabilities 1,065,960 915,592 10,234 7,627

Net assets 117,164 111,356 118,515 120,220

26

Statement of financial position as at 31 March 2017


Statement of financial position as at 31 March 2017 (continued)

Group Company

2017 2016 2017 2016 Note £000 £000 £000 £000

Reserves

Retained earnings 116,929 109,353 118,327 118,350

Revaluation reserve 235 2,003 188 1,870

Total funds 117,164 111,356 118,515 120,220

The notes on pages 30 to 58 are an integral part of these financial statements. The financial statements on pages 25 to 58 were approved by the Board of Directors on 1 August 2017 and were signed on its behalf by:

David Smith

Stephen Terrell

Company registration number: 00377361


Statement of changes in equity for the year ended 31 March 2017

Group

Retained Revaluation Total earnings reserve £000 £000 £000

Balance as at 1 April 115,797 3,487 119,284

Loss for the financial year (6,585) - (6,585)

Other comprehensive income / (loss) for the year 141 (1,484) (1,343)

Total comprehensive loss for the year (6,444) (1,484) (7,928)

Balance as at 31 March 2016 109,353 2,003 111,356

Balance as at 1 April 2016 109,353 2,003 111,356

Profit for the financial year 7,461 - 7,461


Total comprehensive income / (loss) for the year 7,576 (1,768) 5,808

Balance as at 31 March 2017 116,929 235 117,164

Company

Retained Revaluation Total earnings reserve £000 £000 £000


Profit for the financial year 11,653 - 11,653


Total comprehensive income / (loss) for the year 11,794 (1,340) 10,454

Balance as at 31 March 2016 118,350 1,870 120,220


Loss for the financial year (138) - (138)


Total comprehensive (loss) for the year (23) (1,682) (1,705)

Balance as at 31 March 2017 118,327 188 118,515


Consolidated statement of cash flows for the year ended 31 March 2017

2017 2016

£000 £000 £000 £000

Net cash outflow from operating activities (604) (4,303)

Taxation 115 1,103

Cash used in operating activities (489) (3,200)

Cash flows from investing activities

Purchase of financial instruments (17,905) -

Purchase of insurance business investment assets (16,229) -

Purchase of tangible and intangible assets (1,611) (1,308)

Sale of financial instruments 29,935 2,513

Sale of insurance business investment assets 17,720 -

Interest and investment income received 663 1,888

Dividend from long term insurance business* - 5,000

Cash generated from investing activities 12,573 8,093

Net increase in cash and cash equivalents 12,084 4,893

Cash and cash equivalents at the beginning of the year 16,249 11,356

Cash and cash equivalents arising on acquisition (Note 12) 102 -

Cash and cash equivalents at the end of the year 28,435 16,249

Cash and cash equivalents consists of:

Insurance business 9,717 4,888

Less: long term insurance business (5,515) (2,957)

4,202 1,931

Scheme administration business 24,233 14,318

28,435 16,249

Reconciliation of profit / (loss) for the financial year to net cash outflow from operating activities

Profit / (loss) for the financial year 7,461 (6,585)

Tax charge / (credit) on profit / (loss 420 (243)

(Gains) / losses from financial instruments (7,086) 588

Long term insurance profit (2,189) (2,075)

Finance income (143) (87)

Surplus on sale of tangible assets - (3)

Acquisition costs capitalised (74) -

Depreciation of tangible assets 1,093 916

Amortisation of intangible assets 181 -

Difference between pension charge and cash contributions 477 150

Increase in trade receivables (3,079) (2,956)

Increase in trade payables 2,335 5,992

Net cash outflow from operating activities (604) (4,303)

* During the year dividends totalling £nil (2016: £10.0m) were received by the Company from B&CE Insurance Limited.

Of this amount, £nil was transferred from the long-term insurance business (2016: £5.0m).


Notes to the financial statements

1. Accounting policies

General information

B&CE Holdings Limited, previously named Building and Civil Engineering Holidays Scheme Management Limited, is a private limited company, limited by guarantee, not having a share capital and the liability of the members is limited to £1. The Company is incorporated and domiciled in United Kingdom. The address of its registered office is Manor Royal, Crawley, West Sussex, RH10 9QP.

The Company and all its wholly-owned subsidiaries are referred to as the ‘Group’ or ‘B&CE’ throughout these financial statements.

Statement of compliance

The financial statements of B&CE Holdings Limited have been prepared in compliance with the applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including Financial Reporting Standard 102, ‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (‘FRS 102’) and the Companies Act 2006.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements are prepared under the historical cost conventions as modified by the recognition of certain financial assets and liabilities at fair value, and applicable accounting standards in the United Kingdom.

The Group prepares its financial statements in accordance with Schedule 6 to SI 2008/410. However, as permitted by the Companies Act, the financial statements formats have been adapted, as necessary, to give a true and fair view of the state of affairs and the profit / (loss) of the Group. In particular, financial information on the Group’s insurance business activities is presented in a manner having regard to the provisions of the Companies Act applicable to insurance companies.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group and Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in policy ‘Critical accounting judgements and key source of estimation uncertainty’ below.

Going concern

The Group made a profit after tax of £7.5m in the year and has net assets of £117.2m as at 31 March 2017. The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic report and Directors’ report. These reports also describe the financial performance of the Group and references: its objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposure to credit risk, liquidity risk and market risk. Based on the liquid assets held by the Group as at 31 March 2017 and the budgeted cash flows prepared for the foreseeable future from the date of approval of these financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Basis of consolidation

The Group financial statements consolidate the results of the Company and its subsidiaries. Uniform accounting policies have been applied across the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Exemption for qualifying entities under FRS 102

FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have been complied with. A qualifying entity is defined as a member of a group that prepares publicly available financial statements, which give a true and fair view, in which the member is consolidated.

The Company has taken advantage of the exemption from the requirement to prepare a statement of cash flows as required by paragraph 3.17(d) of FRS 102.

Revenue

Revenue represents scheme administration fees (excluding value added tax) and general and long-term insurance business premium income (excluding insurance premium tax) receivable, measured at fair value of the services provided, net of VAT (if applicable), and recognised when the right to consideration has been earned. Any revenue receivable in advance of the full service being rendered is recognised in the Statement of financial position as deferred income.

Details of the Group’s products and services are included in the Strategic report.

Accrued income

Accrued income comprises interest due from the last interest payment date to the year end date in respect of fixed interest investment gilts and bonds and bank deposits, and dividends due on equity holdings where the ex-date is prior to year end.


Notes to the financial statements (continued)

1. Accounting policies (continued)

Insurance contracts

Classification of insurance and investment contracts

B&CE Insurance Limited issues contracts that transfer insurance risk or financial risk or both.

i) Insurance contracts

Insurance contracts are those contracts that transfer significant insurance risk. Such contracts may also transfer financial risk.

ii) Unit linked investment contracts

Amounts received in respect of unit-linked investment contracts, which principally involve the transfer of financial risk, are accounted for using deposit accounting, under which amounts collected are credited directly to the Statement of financial position, as an adjustment to the liability to the policyholder. Financial liabilities in respect of unit-linked investment contracts are measured at fair value through profit and loss, and are presented in the Statement of financial position as technical provisions for linked liabilities. Fees receivable from unit-linked investment contracts are recognised in the Consolidated statement of comprehensive income in the year they are assessed.

Long-term business provision

The long-term business provision is computed by a Fellow of the Institute of Actuaries, on the basis of recognised actuarial methods with due regard to the actuarial principles set out in Council Directive 2002/83/EC. The valuation basis adopted reflects the value of related assets and the yield derived there from, together with a prudent assessment of future rates of return on new monies receivable as income from existing business (premiums and investment income). The principal assumptions underlying the calculation of the long-term business provision are set out in Note 16.

Long-term business reinsurance contracts

Long-term business is ceded to reinsurers under contracts to transfer all of the risk (Note 21).

Technical provision for linked liabilities

Liabilities under unit-linked contracts are recognised as and when the units are created and are dependent on the value of the underlying financial assets. The technical provision for linked liabilities also includes amounts in respect of unit-linked contracts which principally involve the transfer of financial risk (see unit linked investment contracts).

Acquisition costs

All acquisition costs are charged to the Consolidated statement of comprehensive income when incurred.

In respect of general insurance, in the opinion of the Directors, deferment of acquisition costs would not have a material impact on the result of the period or the financial position of the Group. In respect of long-term insurance, linked business acquisition costs have not been deferred due to the uncertainties over the achievement of future margins arising from future potential discontinuances of the stakeholder policies.

Premiums

General business premiums written relate to business incepted during the year. All general business written is United Kingdom accident insurance.

Net operating expenses

The majority of the overhead costs in relation to the Group, including the long-term business provisions, are reported under operating expenses. This is considered to be the most appropriate allocation for disclosure purposes and understanding of the financial results.

Employee benefits

The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined benefits and defined contribution pension plans.

(i) Short term benefits

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

(ii) Defined contribution scheme

Since the defined benefit pension scheme closed to new entrants in January 2014, the Group provides a defined contribution arrangement for employees in B&CE’s trust based The People’s Pension Scheme, the assets of which are independent of the Group. Once the contributions have been paid, the Group has no further payments obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the Statement of financial position.

(iii) Defined benefit scheme

The Group operates a defined benefit pension scheme for the benefit of a group of its employees, the assets of which are held separately from those of the Group in independently administered funds. The scheme closed to new members from 4 January 2014.

Pension scheme assets are measured using market value. Pension scheme liabilities are measured using the projected unit actuarial method and are discounted at the current rate of return on a high quality corporate bond of equivalent terms and currency to the liability. The increase in the present value of the liabilities of the Group’s defined benefit pension schemes expected to arise from employee service in the period is charged to net operating expenses.


The expected return on the schemes’ assets and the increase during the year in the present value of the schemes’ liabilities arising from the passage of time are included in other finance income. Actuarial gains and losses are recognised in the Consolidated statement of comprehensive income.

Pension schemes’ surpluses, to the extent that they are considered recoverable, or deficits are recognised in full and presented on the face of the Statement of financial position net of the related deferred tax.

Taxation

Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the Consolidated statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is also recognised in other comprehensive income or directly in equity respectively.

Current or deferred taxation asset and liabilities are not discounted.

Current taxation

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations on which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the reporting date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the reporting date.

A net deferred tax asset is recognised as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can be deducted.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the reporting date.

Value added tax

Most of the Group’s activities are exempt from value added tax and only a small proportion of the input tax suffered is recoverable. Where appropriate, the costs include irrecoverable value added tax.

Operating leases

Operating lease rentals are charged on a straight line basis to the Consolidated statement of comprehensive income, over the lease term.

Business combinations and goodwill

Business combinations are accounted for by applying the purchase method. The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination.

On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill. Where the fair value of contingent liabilities cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.

Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase consideration over the fair values to the Group’s interest in the identifiable net assets, liabilities and contingent liabilities acquired.

Goodwill is amortised over its expected useful life. The Company has estimated the useful life to be 5 years. Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the income statement. Reversals of impairment are recognised when the reasons for the impairment no longer apply.

Tangible and intangible assets, depreciation and amortisation

Property, plant and equipment are held at their historical cost less accumulated depreciation and any accumulated impairment, where applicable. Additions to property, plant and equipment are capitalised at cost including any direct installation costs.

Provision is made for depreciation of property, plant and equip-ment on a straight line basis at the following rates per annum:

%

Freehold land -

Freehold premises - building 3.0

Office furniture 10.0

Freehold premises – plant and machinery 10.0

Motor vehicles 20.0

Office machinery – computer equipment 33.3

Office machinery – office equipment 20.0



1. Accounting policies (continued)

Tangible and intangible assets, depreciation and amortisation (continued)

Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that economic benefits associated with the item will flow to the Company and the cost can be measured reliably.

The carrying amount of any replaced component is derecognised. Major components are treated as a separate asset where they have significantly different patterns of consumption of economic benefits and are depreciated separately over its useful life.

Repairs and maintenance are expensed as incurred.

Tangible assets are derecognised on disposal or when no future economic benefits are expected. On disposals, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss and included in ‘Net operating expenses’.

Intangible software assets are initially recognised at cost. After recognition, intangible software assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible software assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years. The rate of amortisation of the CHAT system software assets is 20% and any enhancements over the remaining life of the asset.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts, where applicable, are shown within borrowings in current liabilities.

Financial instruments

The Group has chosen to adopt the recognition and measurement provisions of IAS 39 (as amended following the publication of IFRS 9) and disclosure requirements of sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Classification

(a) Financial assets

The Group classifies its financial assets in the following categories:

• financial assets at fair value through profit or loss;

• loans and receivables; and

• available-for-sale financial assets

The classification depends on the purpose for which the investments were acquired and is determined at initial recognition.

(b) Financial liabilities

The Group classifies its financial liabilities at fair value through profit or loss (FVTPL).

(ii) Recognition and de-recognition

Purchases and sales of financial assets are recognised on trade-date i.e. the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the right to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

(iii) Measurement

At initial recognition, the Group measures a financial asset and liability at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value are recognised as follows:

• for ‘financial assets at fair value through profit or loss’ – in profit or loss within (losses) / gains from financial instruments

• for available-for-sale financial assets that are monetary securities denominated in a foreign currency – translation differences related to changes in the amortised cost of the security are recognised in profit or loss and other changes in the carrying amount are recognised in other comprehensive income

• for other monetary and non-monetary securities classified as available-for-sale – in other comprehensive income.

Investment assets, quoted shares and other securities are recorded at market value which is bid price or where investments are dealt at a single price this value is used.

The realised profit or loss on all investment disposals is recognised in the Consolidated statement of comprehensive income under (losses) / gains from financial instruments. The unrealised profit or loss on financial instruments at fair value through profit or loss are recognised in the Consolidated statement of comprehensive income under (losses) / gains from financial instruments.


Unrealised profits on financial instruments available for sale are recognised in the Consolidated statement of comprehensive income, and create an investment revaluation reserve on the Statement of financial position. Unrealised losses on financial instruments available for sale are recognised in the Consolidated statement of comprehensive income under (losses) / gains from financial instruments unless previously recognised unrealised gains are held in the investment revaluation reserve in which case the unrealised loss reduces or eliminates the unrealised gains and is recognised in the Consolidated statement of comprehensive income.

In the Company’s financial statements, investments in subsidiaries are valued at cost or, where there has been an impairment in value, at their recoverable amount.

Dividends on financial assets at fair value through profit or loss and available-for-sale equity instruments are recognised in the Consolidated statement of comprehensive income as part of (losses) / gains from financial instruments when the Group’s right to receive payments is established.

Interest income from financial assets at fair value through profit or loss is included in (losses) / gains from financial instruments. Interest on available-for-sale securities, held-to-maturity investments and loans and receivables calculated using the effective interest method is recognised in the Consolidated statement of comprehensive income as part of revenue from continuing operations.

Financial liabilities designated as fair value through profit or loss on initial recognition are subsequently measured at fair value with all gains and losses being recognised in the Consolidated statement of comprehensive income.

Details on determination of the fair value of financial instruments are disclosed in Note 24.

(iv) Impairment

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.

If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss.

Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a subsequent period.

If the fair value of a debt instrument classified as available-for-sale increases in a subsequent period and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statement requires management to make judgements estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, revenue and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Defined benefit pension scheme (Note 19)

The Group has obligations to pay pensions benefits to certain employees. The cost of these benefits and present value of the obligation depend on a number of factors, including: life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the Statement of Financial Position. The assumptions reflect historical experience and current trends.

Deferred tax

Deferred tax assets are assessed based on the current trading performance and expected future taxable profits of the Group.

Deferred income

Revenue, which is receivable in advance of the full service being rendered, is recognised in the Statement of financial position as deferred income.



2. Business information – all business is conducted within the UK

Revenue Profit / (loss) before tax Net assets

2017 2016 2017 2016 2017 2016 £000 £000 £000 £000 £000 £000

Business analysis

Schemes administration 21,407 9,203 1,038 (7,286) 44,163 45,129

General and long-term insurance business 9,287 8,485 6,843 458 73,001 66,227

30,694 17,688 7,881 (6,828) 117,164 111,356

2017 2016 Scheme Insurance Group Scheme Insurance Group administration business total administration business total £000 £000 £000 £000 £000 £000

Revenue

Management fees 21,366 - 21,366 9,179 - 9,179

Insurance business – general - 1,193 1,193 - 1,290 1,290

Insurance business – long-term - 8,094 8,094 - 7,195 7,195

Miscellaneous net income 41 - 41 24 - 24

21,407 9,287 30,694 9,203 8,485 17,688

Gains / (losses) from financial instruments

Income from financial instruments 446 610 1,056 1,313 2,237 3,550

Realised profit on financial instruments 2,283 2,804 5,087 70 1,283 1,353

Movement on financial instruments - 943 943 - (5,491) (5,491)

2,729 4,357 7,086 1,383 (1,971) (588)

Finance income

Interest 61 73 134 40 39 79

Other finance income (Note 19) 9 - 9 8 - 8

70 73 143 48 39 87

3. Net operating expenses

Group

2017 2016 £000 £000

Schemes administration – other 23,169 17,920

Insurance business – other 6,795 6,470

29,964 24,390

Insurance business – provision 78 (375)

30,042 24,015


Insurance expenses within net operating expenses: 2017 2016 £000 £000

Acquisition costs long-term (399) (560)

general (152) (238)

Administration costs long-term (5,120) (3,962)

general (242) (355)

Claims long-term (309) (973)

general (480) (289)

Provision long-term (78) 375

General expenses (93) (93)

(6,873) (6,095)

4. Profit / (loss) before interest and taxation

Group Company

2017 2016 2017 2016 £000 £000 £000 £000

Profit / (loss) before interest and taxation is stated after charging:

Staff costs (Note 5) 15,676 12,422 15,552 12,422

Directors’ remuneration (Note 6) 492 447 197 124

Operating lease charges (Note 22) 580 314 580 314

Amortisation of intangible assets (Note 9) 25 - - -

Depreciation of tangible assets (Note 10) 1,249 923 1,093 916

Services provided by the Company’s auditors and its associates

Fees payable to the Company’s auditors for the audit of the Company and the Group’s consolidated financial statements 85 75 85 75

Fees payable to the Company’s auditors and its associates for other services:

The audit of the Company’s subsidiaries 54 43 - -

Audit-related assurance services 49 32 - -

Tax compliance services 20 13 - -

Tax advisory services 3 16 1 12

Other advisory services 47 79 - 14

Notes: (a) Audit-related assurance services included regulatory reporting on the PRA/FCA returns and Stakeholder Declaration.

(b) All audit fees are exclusive of value added tax.



5. Employee information

Group Company

2017 2016 2017 2016 £000 £000 £000 £000

Staff costs during the year amounted to:

Wages and salaries 12,821 10,017 12,734 10,017

Social security costs 1,429 1,201 1,393 1,201

Other defined benefit pension costs (Note 19) 477 521 477 521

Other defined contribution pension costs 949 683 948 683

15,676 12,422 15,552 12,422

Other defined benefit pension costs above are the current service costs under Section 28 of FRS 102. The employer contributions amounted to £0.4m (2016: £0.4m) (Note 19).

Other defined contribution pension costs are in respect of employees who are not members of the defined benefits pension scheme and are members of The People’s Pension.

Group Company

2017 2016 2017 2016 Number Number Number Number

The average monthly number of staff employed during the year was: 404 293 403 293

Management 11 10 11 10

Clerical 389 279 388 279

Manual / Services 4 4 4 4

404 293 403 293

The figures disclosed in this note include Executive Directors but exclude Non-Executive Directors.

6. Directors’ remuneration Group Company

2017 2016 2017 2016 £000 £000 £000 £000

Aggregate remuneration 492 447 197 124

Accrued pension at year end 54 52 - -

The aggregate remuneration for the highest paid Director was:

Group Company

2017 2016 2017 2016 £000 £000 £000 £000

Aggregate remuneration 117 105 - -

Accrued pension at year end 28 27 - -

No compensation payments for loss of office were paid to Directors who resigned during the year (2016: £nil).


7. Tax charge / (credit) on profit / (loss) Group

2017 2016 £000 £000

a) Analysis of tax charge / (credit) on profit / (loss) for the year

Current tax:

UK corporation tax on profit / (losses) for the year (excluding long-term insurance business) (748) (202)

UK corporation tax on long-term insurance business 1,231 255

Adjustment in respect of previous periods (39) (262)

Total current tax 444 (209)

Deferred tax credit attributable to long-term insurance business (Note 17) (24) (34)

Total tax charge / (credit) on ordinary activities 420 (243)

b) Factors affecting tax charge / (credit) for the year

The tax assessed for the year is lower (2016: higher) than the standard rate of corporation tax in the UK of 20% (2016: 20%). The differences are explained below:

Group

2017 2016 £000 £000

Profit / (loss) before taxation 7,881 (6,828)

Profit / (loss) before taxation multiplied by standard rate of tax in the UK 20% (2016: 20%) 1,576 (1,366)

Effects of:

Income and expenses not taxable (723) (98)

Adjustment in respect of previous periods (39) (262)

Other timing differences (2) (14)

Losses not recognised 15 -

Utilisation of current year tax losses - 1,497

Utilisation of previously unrecognised tax losses (407) -

Total tax charge / (credit) for the year 420 (243)

Deferred taxation

There are no recognised deferred tax assets or liabilities in respect of the B&CE Insurance Limited long-term fund, except as disclosed in Note 17. There are no deferred tax assets or liabilities in relation to the insurance business shareholders’ fund (non-technical account). There are no potential or actual deferred tax assets or liabilities in respect of B&CE Financial Services Limited at the year end (2016: no potential or actual assets or liabilities). There are no potential or actual deferred tax assets or liabilities in respect of Constructing Better Health.

Factors affecting future tax changes

Changes to the UK corporation tax rates were enacted as part of the Finance Bill 2015 and the Finance Bill 2016. These include reductions to the main rate to 19% from 1 April 2017 and to 17% from 1 April 2020.



8. Profit / (loss) for the financial year

As prescribed by section 408 of the Companies Act 2006, the Company’s statement of comprehensive income has not been included in these financial statements. The Company’s loss for the financial year was £0.1m (2016: £11.7m profit).

9. Intangible assets

Goodwill Software Total £000 £000 £000

Group (Scheme Administration only)

Cost

As at 1 April 2016 - - -

Acquisitions (Note 12) 126 205 331

Additions - 53 53

As at 31 March 2017 126 258 384

Accumulated amortisation

As at 1 April 2016 - - -

Charge for the year 25 156 181

As at 31 March 2017 25 156 181

Net book value

As at 31 March 2017 101 102 203

As at 31 March 2016 - - -

The Company did not have any intangible assets at the year-end (2016: £Nil)


10. Tangible assets

Freehold land Office Office Motor Total land buildings furniture machinery vehicles £000 £000 £000 £000 £000

Group (Scheme Administration only)

Cost

As at 1 April 2016 6,118 1,103 4,245 39 11,505

Acquisition - - 2 - 2

Additions 129 378 1,052 - 1,559

Disposals - (439) (631) - (1,070)

As at 31 March 2017 6,247 1,042 4,668 39 11,996

Accumulated depreciation

As at 1 April 2016 3,722 605 3,011 25 7,363

Charge for the year 150 121 815 6 1,092

Disposals - (439) (631) - (1,070)

As at 31 March 2017 3,872 287 3,195 31 7,385

Net book value

As at 31 March 2017 2,375 755 1,473 8 4,611

As at 31 March 2016 2,396 498 1,234 14 4,142

General and long-term insurance business £000 £000

Cost

As at 1 April 2016 33 33

Additions - -

Disposals - -

As at 31 March 2017 33 33


As at 1 April 2016 33 33

Charge for the year - -

Disposals - -

As at 31 March 2017 33 33

Net book value

As at 31 March 2017 - -

As at 31 March 2016 - -



10. Tangible assets (continued)

Freehold land Office Office Motor Total land buildings furniture machinery vehicles £000 £000 £000 £000 £000

Company

Cost

As at 1 April 2016 6,118 1,103 4,245 39 11,505

Additions 129 378 1,052 - 1,559

Disposals - (439) (631) - (1,070)

As at 31 March 2017 6,247 1,042 4,666 39 11,994


As at 1 April 2016 3,722 605 3,011 25 7,363

Charge for the year 150 121 815 6 1,092

Disposals - (439) (631) - (1,070)

As at 31 March 2017 3,872 287 3,195 31 7,385

Net book value

As at 31 March 2017 2,375 755 1,471 8 4,609

As at 31 March 2016 2,396 498 1,234 14 4,142


11. Financial instruments

Non-current assets Group Company

2017 2016 2017 2016 £000 £000 £000 £000


Financial instruments – available for sale

As at 1 April 29,655 29,636 25,118 24,955

Additions 17,905 4,000 13,939 4,000

Disposals (27,653) (2,443) (23,248) (2,443)

Revaluation deficit transferred to revaluation reserve (1,721) (1,538) (1,634) (1,394)

Market value as at 31 March 18,186 29,655 14,175 25,118

Above investments include the following:

Debt securities and other fixed income securities - 15,975 - 11,438

Shares and other variable yield securities and units in unit trusts 18,186 13,680 14,175 13,680

Market value as at 31 March 18,186 29,655 14,175 25,118

General and long-term insurance business 2017 2016 £000 £000

Financial instruments at fair value through profit or loss

Debt securities and other fixed income securities - 43,564

Shares and other variable yield securities and units in unit trusts 64,362 16,736

Market value as at 31 March 64,362 60,300

Above investments include the following:

Debt securities and other fixed income securities - 39,489

Shares and other variable yield securities and units in unit trusts 63,419 11,684

Cost as at 31 March 63,419 51,173

There is no difference between the cost and carrying value of assets held to cover linked liabilities £547k (2016 – £459k) which are entirely cash and cash equivalent balances.



12. Investments in subsidiaries

Group Company

2017 2016 2017 2016 £000 £000 £000 £000

Investment in subsidiary undertakings - - 89,050 89,050

The Company owns 100% of the issued ordinary share capital of B&CE Financial Services Limited and B&CE Insurance Limited, both of which are incorporated and registered in England, included above at cost. The Company wholly owns Constructing Better Health, a company limited by guarantee, incorporated and registered in England, also included at cost. The Company also owns 100% of the issued ordinary share capital of The People’s Pension Trustee Limited (£1), People’s Financial Services Limited (£1) and People’s Administration Services Limited (£1), all three companies were dormant as at 31 March 2017. On 1 April 2017, under an intra-group corporate restructure, People’s Financial Services Limited became the intermediate holding company of B&CE Insurance Limited and B&CE Financial Services Limited.

The Directors believe the carrying value of the investments is supported by the underlying assets.

Acquisition of Constructing Better Health

On 1 April 2016 the Group acquired Constructing Better Health, a company limited by guarantee, with its registered office at Manor Royal, Crawley, West Sussex, RH10 9QP, for £1.

Recognised amounts of identifiable assets acquired and liabilities assumed at date of acquisition, based on their fair values, are:

£000

Intangible assets 205

Tangible assets 2

Trade and other receivables 174

Cash and cash equivalents 102

Trade and other payables (535)

Total identifiable net liabilities (52)

Goodwill arising on acquisition comprises:

Net liabilities assumed 52

Costs associated with the acquisition 74

126

Revenue and loss for the year arising from Constructing Better Health’s operations since the date of acquisition is not considered material to the Group’s results for the year.


13. Trade and other receivables

Scheme administration Group Company

2017 2016 2017 2016 £000 £000 £000 £000

Amounts owed by Group undertakings - - 3,570 1,056

Trade receivables 1,694 1,238 23 305

Other receivables 8,385 5,123 53 34

Accrued income 2 261 2 161

Prepayments 1,281 364 1,244 344

Taxation - 36 - 36

11,362 7,022 4,892 1,936

Amounts owed by Group undertakings represent recharged administration costs for the final quarter of the year which are normally settled in the following quarter.


Other receivables 907 1,776

Accrued income - 802

Prepayments 33 19

940 2,597

14. Cash and cash equivalents

Group Company

2017 2016 2017 2016 £000 £000 £000 £000


Cash at bank and in hand 2,618 14,263 2,197 7,550

Short term deposits 21,615 55 13,826 51

As at 31 March 24,233 14,318 16,023 7,601


Cash at bank and in hand 5,824 4,879

Short term deposits 3,893 9

As at 31 March 9,717 4,888



15. Trade and other payables – amounts falling due within one year

Group Company

Scheme administration 2017 2016 2017 2016 £000 £000 £000 £000

Employer account balances 1,775 1,657 1,775 1,657

Trade creditors 1,739 698 1,700 698

Corporation tax 40 - 40 -

Other taxation and social security 790 600 389 280

Other payables 5,330 4,264 5,327 4,223

Accruals and deferred income 4,758 2,789 1,003 769

14,432 10,008 10,234 7,627


Corporation tax 523 -

Other taxation and social security 404 531

Other payables 726 574

Accruals 135 189

1,788 1,294

16. Long-term business provision

The long-term business provision is computed by a Fellow of the Institute of Actuaries, on the basis of recognised actuarial methods with due regard to the actuarial principles set out in Council Directive 2002/83/EC.

Group

2017 2016 £000 £000

Term assurance: gross provisions 117 127

Term assurance: reinsurer’s share (15) (15)

102 112

All significant classes of business have been valued using a gross premium methodology. No policy has an overall negative provision or a provision less than its current surrender value.

Assumptions are set by reference to current experience, where appropriate, together with reference to publicly available market data, where available. A prudent margin is then included for the purposes of calculating the long-term business provision.

An increase in valuation interest rates would increase the impact of discounting future cash flows in the calculation of the long-term business provision, resulting in a reduced provision. If a higher mortality rate were assumed to apply in the future, the long-term business provision would increase.

Where future premiums are reasonably predictable, stakeholder pension policies are valued as regular premium. As in 2016, an assumption has been made that future regular premiums will cease for all policies given the introduction of The People’s Pension by B&CE Insurance Limited. The premium income received on EasyBuild has reduced significantly over the last few years as contributions have moved over to The People’s Pension. It is likely that the majority of remaining active policyholders will become members of The People’s Pension following the decision to transition them to this scheme in late 2017.


Expenses are separated into attributable and non-attributable expenses. The per policy expense assumption for the unit-linked stakeholder pension product is based on the level of attributable expenses. It is expected that in the future the Company will no longer incur attributable expenses because these will be incurred by B&CE Financial Services Limited. As a result, the expected future attributable expenses are zero and the per policy expense assumption for stakeholder pension policies for the 2017 long-term business provision is £nil p.a. (£nil p.a. 2016). Non-unit fund related investment expenses are taken directly from the asset portfolios that are managed by Legal & General Investment Management Limited, and therefore no reduction is made to the valuation interest rate.

The expenses remaining within B&CE Insurance Limited are non-attributable. The majority of these are professional fees and therefore future expense increases are linked heavily to wage inflation.

For the 2017 long-term business provision, expenses are assumed to inflate at 4.8% p.a. (4.0% p.a. in 2016). This is based on an assumed long-term rate of Retail Price Index (RPI) inflation of 3.3% p.a. (3.0% in 2016) plus an allowance of 0.5% p.a. to allow adequately for wage inflation. A prudence margin of 1.0% is applied to the resulting rate.

17. Provision for other risks


Deferred tax provision

As at 1 April 152 186

Credited to Consolidated statement of comprehensive income (24) (34)

As at 31 March 128 152

18. Related party transactionsDuring the year the Group and Company made payments to industrial organisations in respect of promotional fees and for the provision of Directors’ services as follows:

Charge for the year Balance outstanding

Industrial organisation 2017 2016 2017 2016 £000 £000 £000 £000

UCATT (merged with Unite on 1 January 2017) 99 132 - -

Unite the Union T & G Section 81 108 27 27

GMB 25 23 8 8

UK Contractors Group* - 12 - -

Civil Engineering Contractors Association* 21 24 3 3

Scottish Building Federation* 30 30 - 6

National Federation of Builders* 24 24 - -

National Specialist Contractors Council* - 6 - -

Federation of Master Builders* 18 24 6 -

Build UK 30 48 18 -

*There were also combined payments totalling £18,890 (2016: £11,400) made to these parties in relation to promoting B&CE though sponsorships at award functions and similar events throughout the year.



18. Related party transactions (continued)There are service level agreements effective for each of the employer federations responsible for appointing a Director which included a fee of £15,000 p.a. plus value added tax. During 2016 and 2017 the union representatives signed service level agreements which include: UCATT appointing three Directors and receiving a fee of £110,000 p.a. plus value added tax, Unite the Union appointing two Directors and receiving a fee of £90,000 p.a. plus value added tax, and GMB appointing one Director and receiving a fee of £25,000 p.a. plus value added tax.

The balance outstanding at the year end is included in trade and other payables due within one year in other payables (see Note 15).

During the year the Group and Company paid £0.4m to the defined benefit pension scheme (2016: £0.4m) and £0.9m to The People’s Pension (2016: £0.7m).

All Directors (shown on pages 9 and 10) and members of the senior management team (shown on pages 11 and 12) are considered to be key management personnel. During the year the Group and Company paid £1.3m (2016: £1.1m) compensation to key management personnel.

There are no other related party transactions requiring disclosure in this year’s financial statements in accordance with Section 33 of FRS 102.

The Group has taken advantage of the exemption available under paragraph 33.1A of FRS 102 “Related party disclosures” not to disclose transactions and balances between Group entities that have been eliminated on consolidation.

19. Pension commitments

The Group operates an occupational defined benefit pension scheme known as the B&CE Staff Pension Scheme (‘Pension Scheme’), which provides benefits based on final pensionable salary. The assets of the Pension Scheme are held separately from those of the Company, in an independently administered trust fund.

The trustees of the Pension Scheme seek contributions from the employer at such rates as the trustees determine, on the advice of the Pension Scheme actuary, to be sufficient to meet the expected cost of the benefits payable from the Pension Scheme. To assess the expected cost of the benefits payable from the Pension Scheme, the trustees obtain regular actuarial valuations of the Pension Scheme from the Pension Scheme actuary. The trustees choose an appropriate funding method for the actuarial valuation, together with an appropriate set of actuarial assumptions. The trustees seek the advice of the Pension Scheme actuary before determining the methods and assumptions.

If the actuarial valuation shows that the Pension Scheme’s assets are insufficient to meet the expected cost of members’ past service benefits, the trustees will put in place a recovery plan which will require additional contributions from the employer.

With effect from 1 December 2014, the employer contribution rate increased from 14.05% to 14.20% of pensionable salary for all members. Members contribute 6.3% of pensionable salary.

The latest triennial actuarial valuation of the Pension Scheme, using the projected unit method, performed by the professionally qualified appointed Pension Scheme actuary took place on 31 December 2013. The results show a reduction in the deficit position from £2.5m at 31 December 2010 to a surplus of £2.1m at 31 December 2013, a funding level of 104% of liabilities (2010 – 94%). The Pension Scheme actuary is currently in the process of carrying out the valuation at 31 December 2016.

The estimated solvency level or cost of securing members’ benefits should the Pension Scheme be wound up on the valuation date calculated by the Pension Scheme’s actuary was 74% or a shortfall of £18.9m (2010: 79%, or a shortfall of £11.1m).

On 3 January 2014 the Pension Scheme closed to new entrants and all non-member employees are offered membership into The People’s Pension in its place.

The Company estimates the employer contributions into the Pension Scheme for the year ending 31 March 2018 to be £0.4m.


The principal assumptions used by the Pension Scheme actuary in agreement with the Company after updating the latest valuation of the Pension Scheme for Section 28 of FRS 102 purposes were:

31 March 31 March 31 March 2017 2016 2015 % p.a. % p.a. % p.a.

Discount rate 2.60 3.50 3.20

Rate of increase in salaries 3.40 3.15 3.25

Price inflation 3.40 3.15 3.25

Pension increases:

- on pension accrued before 1 January 1995 3.00 3.00 3.00

- on pension accrued between 1 January 1995 and 31 March 2006 3.30 3.05 3.15

- on pension accrued since 1 April 2006 1.85 1.75 1.80

Sensitivity analysis

Change in assumptions compared with Actuarial value of liabilities 31 March 2017 actuarial assumptions on 31 March 2017 £000

- 0.5% decrease in discount rate 72,603

- 1 year increase in member life expectation 68,014

- 0.5% increase in salary increases 66,218

- 0.5% increase in inflation 69,224

Male Female

Average future life expectancy in years for a pensioner currently aged 60 27.9 29.4

Average future life expectancy in years at age 60 for a non-pensioner currently aged 45 29.0 30.9



19. Pension commitments (continued)

On the basis of Section 28 of FRS 102, the assets valued at bid price, where appropriate, and liabilities of the Pension Scheme and the expected rates of return were:

Value at Value at Value at 31/03/17 31/03/16 31/03/15 £000 £000 £000

Equities 16,129 14,155 34,080

Debt securities – corporate * 20,421 19,630 19,783

Diversified Growth Fund 19,094 16,910 -

Debt securities – government * 12,614 10,142 10,365

Property 3,121 1,350 1,180

Cash and cash equivalents 209 518 244

Total market value assets 71,588 62,705 65,652

Present value of scheme liabilities (65,399) (56,781) (61,629)

Surplus in the scheme 6,189 5,924 4,023

Deferred tax - - (38)

Related deferred tax liability - - -

Irrecoverable surplus (6,189) (5,924) (3,985)

Net scheme asset - - -

* There has been a change in investment strategy during the year, and at 31 March 2017 the allocation to government debt securities is now invested in a gilt based LDI fund, and the allocation to corporate debt securities is now invested in a buy-and-maintain credit fund.

Irrecoverable surplus

The Group’s ability to receive a refund, where a pension surplus exists on the wind up of the Pension Scheme is restricted pursuant to Clause 17 of the Pension Scheme’s trust deed, which specifically prevents any repayment to the employer. Hence, the Group does not recognise any such surplus at the year-end.


2017 2016 £000 £000

Analysis of amounts recognised in the Consolidated statement of comprehensive income:

Analysis of the amount charged to net operating expenses

Current service cost (477) (521)

Total operating charge (477) (521)

Analysis of the amounts credited to finance income

Interest income on the scheme assets 2,161 2,066

Interest on pension scheme liabilities (1,945) (1,929)

Impact of asset ceiling on net interest (207) (129)

Net return 9 8

Charge recognised in the Consolidated statement of comprehensive income (468) (513)

Analysis of amounts recognised in other comprehensive income (OCI):

Actual return on assets excluding amounts included in net interest (8,639) (2,847)

Actuarial gain on scheme obligations 8,466 4,761

Less: amount not recognised in these financial statements 288 (1,773)

Actuarial gain recognised in OCI 115 141

Reconciliation of present value of scheme liabilities:

1 April 56,781 61,629

Current service cost 477 521

Interest cost 1,945 1,929

Contributions paid by members 157 164

Actuarial loss / (gain) 8,466 (4,761)

Benefits paid (2,427) (2,701)

31 March 65,399 56,781

Reconciliation of fair value of scheme assets:

1 April 62,705 65,652

Interest income on scheme assets 2,161 2,066

Contributions paid by members 157 164

Contributions paid by employer 353 371

Actuarial return on assets 8,639 (2,847)

Benefits paid (2,427) (2,701)

31 March 71,588 62,705


19. Pension commitments (continued)

The Pension Scheme asset and liability values recognised on the basis of Section 28 of FRS 102 reflect market conditions at the Group and Company’s year-end date and can be expected to vary greatly from year to year, without necessarily affecting the Pension Scheme’s long-term ability to provide the required benefits.

20. Contingent liabilities

Building and Civil Engineering Benefits Scheme and Employee Life Cover from B&CE

The Board of Directors periodically review the financing of the death benefits paid under the Building and Civil Engineering Benefits Scheme and Employee Life Cover from B&CE scheme and determine the level of financial support based on the Company’s resources. There was no liability as at 31 March 2017 (2016: Nil).

The Building and Civil Engineering Charitable Trust

The Board of Directors have given an undertaking to donate £0.5m by 31 March 2019 if it is required by the Charitable Trust. At the year-end £2.6m has been transferred by the Group to the Charitable Trust since its formation in October 1991.

The possibility of the outflow on any contingent liability is remote.

21. Reinsurance arrangements

Reinsurance arrangements are in force as follows:

Term assurance – 90% quota share with an 11.4% overriding commission receivable; and

Linked business – 100% reinsurance of unit liabilities.

22. Financial commitments

At 31 March 2017 the Group had the following future minimum lease payments under non-cancellable operating leases as follows:

Group Company

Payments due 2017 2016 2017 2016 £000 £000 £000 £000

Not later than one year 336 163 336 163

Later than one year and not later than five years 400 35 400 35

736 198 736 198

23. Ultimate parent and controlling party

The immediate parent, the ultimate parent and the controlling party is B&CE Holdings Limited, a company incorporated in the United Kingdom which owns 100% of: B&CE Insurance Limited, a health composite insurance company providing life and pensions and accident cover; B&CE Financial Services Limited, which provides administration services for group company products; Constructing Better Health, which is a national scheme for the management of occupational health in the construction industry and two dormant companies, People’s Financial Services Limited and People’s Administration Services Limited.

B&CE Holdings Limited is the parent of the smallest and the largest group of undertakings to consolidate these financial statements.


51

B&CE Holdings Limited Annual report and financial statements for the year ended 31 March 2017 |

24. Financial risk management

The Group issues contracts that transfer insurance or financial risk or both. The Group is also exposed to a range of financial risks through its financial assets, financial liabilities (investment contracts), reinsurance assets and policyholder liabilities. This section summarises these risks and the way the Group manages them.

a) Insurance risk

The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable.

For a portfolio of insurance contracts where the theory of probability is applied to pricing and provisioning, the principal risk that the Group faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are greater than estimated. Insurance events are random, and the actual number and amount of claims and benefits will vary from year to year from the level established using statistical techniques.

Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be affected by a change in any subset of the portfolio. The Group has developed its insurance underwriting strategy to diversify the type of insurance risks accepted and within each of these categories to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.

Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk, geographical location and type of industry covered.

(i) Frequency and severity of claims

The accident liability contracts frequency and severity of claims can be affected by several factors. The most significant are the increasing level of awards for the damage suffered as a result of exposure to construction hazards. The Group manages these risks through its underwriting strategy and proactive claims handling.

The concentration of accident insurance risk accepted is wholly within the United Kingdom; the carrying amount of outstanding claims arising from the accident insurance contracts is £390k (2016: £269k).

(ii) Sources of uncertainty in the estimation of future claims payments

There are no sources of estimation uncertainty in establishing the ultimate liability arising from claims made under insurance contracts.

Claims on insurance contracts are payable on a claims-occurrence basis. The Group is liable for all insured events that occurred during the term of the contract, even if the loss is discovered after the end of the contract term. Claim events covered by insurance contracts are required to be notified to the Group within a year of the event occurring and a larger element of the claims provision relates to incurred but not reported claims (IBNR). There are several variables that affect the amount and timing of cash flows from these contracts. These mainly relate to the inherent risks of the business activities carried out by individual contract holders and the risk management procedures they adopted. The compensation paid on these contracts is the monetary awards granted for bodily injury suffered by employees (for employer’s liability covers). Such awards are pre-determined lump-sum payments in accordance with the policy conditions.

The estimated cost of claims includes direct expenses to be incurred in settling claims. The Group takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established. The liability for these contracts comprises a provision for IBNR, a provision for reported claims not yet paid and a provision for unexpired risks at the end of the reporting period.

In calculating the estimated cost of unpaid claims (both reported and not), the Group estimation techniques are an estimate based upon actual claims experience using predetermined formulae where greater weight is given to actual claims experience as time passes.

The estimation of IBNR is generally subject to a greater degree of uncertainty than the estimation of the cost of settling claims already notified to the Group, where information about the claim event is available.

In estimating the liability for the cost of reported claims not yet paid, the Group considers information on the cost of settling claims based on previous claims experience.

52



53

24. Financial risk management (continued)

a) Insurance risk (continued)

(iii) Sensitivity analysis

The sensitivity analysis on the general business is immaterial and has therefore not been presented.

(iv) Claim development tables

Claim development tables have not been presented on the general business due to the immateriality of the level of claims nor on the life business as the uncertainty about the amount and timing of the claims payments is typically resolved within one year.

(v) Unit linked contracts

For unit-linked contracts the Group matches all the liabilities with assets in the portfolio on which the unit prices are based. There is therefore no interest, price, currency or credit risk for the Group on these contracts. Amounts under unit-linked contracts are repayable on demand.

b) Financial risk management objectives

The Group is exposed to a range of financial risks, in particular, the key financial risk is that the proceeds from financial assets are not sufficient to fund the obligations arising from insurance policies and investment contracts as they fall due. The most important components of this financial risk are market risk (including interest rate risk, equity price risk and currency risk), credit risk and liquidity risk.

These risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market movements. The risks that the Group faces due to the nature of its investment and liabilities are interest rate risk and equity price risk.

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. It manages these positions within an asset liability management (ALM) framework that has been developed to achieve investment returns in excess of obligations under insurance contracts.

(i) Market risk

Interest rate risk

Interest rate risk arises primarily from investments in fixed interest securities. In addition to the extent that claims inflation is correlated to interest rates, liabilities to policyholders are exposed to interest rate risk. The investments in bonds, gilts and preference shares were sold during the year and units in a mixed investment fund, corporate bond fund and cash trust were purchased in their place.

The Group monitors interest rate risk on a monthly basis by calculating the mean duration of the investment portfolio and of the liabilities to policyholders under insurance contracts. The mean duration is an indicator of the sensitivity of the assets and liabilities to changes in current interest rates. The mean duration of the liabilities is determined by means of projecting expected cash flows using standard actuarial claim projection techniques. This is calculated in a consistent manner with the prior year.

The sensitivity analysis for interest rate risk illustrates how changes in the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates at the reporting date. Due to the changes during the year to the nature of the investments, the sensitivity analysis on interest rate risk is now immaterial and has therefore not been presented for the current year. In the prior year, an increase/decrease of 100 basis points in interest yields would have resulted in an increase/decrease in the profit for the year and increase/decrease in equity of £11.0m assuming all other assumptions remained unchanged.

Equity price risk

The Group is exposed to equity securities price risk as a result of its holdings in a mixed investment fund, classified as financial assets at fair value through profit or loss. Exposures to equity shares in aggregate are monitored in order to ensure compliance with the relevant regulatory limits for solvency purposes. The investments in OEICs were sold during the year and units in a mixed investment fund, corporate bond fund and cash trust were purchased in their place.

The Group has a defined investment policy which sets limits on the Group’s exposure to equities. This policy is used to manage the Group’s price risk arising from its investments in equity securities.


(ii) Credit risk

Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Key areas where the Group is exposed to credit risk are:

• reinsurers’ share of insurance liabilities; and

• amounts due from corporate bond issuers.

The Group manages the levels of credit risk it accepts by placing limits on its exposure to a single counterparty, or groups of counterparties, and to geographical and industry segments. Such risks are subject to regular review. Limits on the level of credit risk by category and territory are approved quarterly by the Board of Directors.

Reinsurance is used to manage insurance risk. This does not, however, discharge the Group’s liability as primary insurer. If a reinsurer fails to pay a claim, the Group remains liable for the payment to the policyholder. The creditworthiness of reinsurers is considered on an annual basis by reviewing their financial strength prior to finalisation of any contract. In addition, management assesses the creditworthiness of all reinsurers and intermediaries by reviewing credit grades provided by rating agencies and other publicly available financial information. The recent payment history of reinsurers is also used to update the reinsurance purchasing strategy. In certain circumstances, deposits from reinsurers are also held as collateral.

The Group’s largest counterparty is Managed Pension Funds Limited (MPF) which a subsidiary of State Street Corporation and is the reinsurer of the unit-linked liabilities. MPF does not have a credit rating. Under Solvency II, the Group is required to hold capital in relation to the risk of MPF defaulting. As at 31 March 2017, the Group had a guarantee in place from State Street Corporation and this parental guarantee allowed the Group to calculate its risk capital based on the credit rating of State Street Corporation which was AA. Since 31 March 2017 the parental guarantee has been removed due to the fact that MPF now has a publicly available Solvency II ratio which can be used to assess the capital requirement. MPF’s solvency ratio is in access of 196% and as such is deemed equivalent to a AA rating. There is also a floating charge is also in place which means that the Group would rank ahead of other reinsurance clients in the event of insolvency.

Credit risk exposures to individual policyholders and groups of policyholders are collected within the ongoing monitoring of the controls associated with regulatory solvency. Where there exists significant exposure to individual policyholders, or homogenous groups of policyholders, a financial analysis equivalent to that conducted for reinsurers is carried out by the management. An analysis of policyholders and reinsurers by credit ratings produced by external rating agencies is produced periodically.

The assets bearing credit risk are summarised below, together with an analysis by credit rating:

Group 2017 2016 £000 £000

Debt securities - 59,539

Cash and cash equivalents 33,950 19,206

Total assets bearing credit risk 33,950 78,745

A-1/A-2 3,544 19,141

AAA 30,250 1,978

AA - 8,656

A - 11,758

BBB - 33,257

Below BBB or not rated 156 3,955

Total assets bearing credit risk 33,950 78,745



55


(b) Financial risk management objectives (continued)

(ii) Credit risk (continued)

The concentration of credit risk has changed compared to the prior year following the sale of the corporate bonds and the purchase of LGIM funds. No credit limits were exceeded during the period. No financial assets are past due or impaired at the reporting date and management expects no significant losses from non-performance by these counterparties.

(iii) Liquidity risk

Liquidity risk is the risk that cash may not be available to pay obligations when due at a reasonable cost. The primary liquidity risk of the Group is the obligation to pay claims to policy holders as they fall due. The projected settlement of these liabilities is modelled, on a regular basis, using actuarial techniques. The Board sets limits on the minimum proportion of maturing funds available to meet such calls and on the minimum level of borrowing facilities that should be in place to cover anticipated liabilities and unexpected levels of demand. The table below analyses the maturity of the Group’s financial liabilities and outstanding claims. All liabilities are presented on a contractual cash flow basis except for the insurance liabilities, which are presented with their expected cash flows.

The amounts disclosed in the table represent undiscounted cash flows.

No Between Between Between Total and contractual 6 months or 6 months 1 year 2 years carrying Group maturity date on demand and 1 year and 2 years and 5 years > 5 years value £000 £000 £000 £000 £000 £000 £000

Financial liabilities

At 31 March 2017

Payables 391 15,830 1 - - - 16,222

Liabilities under unit – linked insurance contracts - 36,933 10,216 20,872 80,821 900,652 1,049,494

Term assurance provision 117 - - - - - 117

Financial liabilities 508 52,763 10,217 20,872 80,821 900,652 1,065,833

No Between Between Between Total and contractual 6 months or 6 months 1 year 2 years carrying Group maturity date on demand and 1 year and 2 years and 5 years > 5 years value £000 £000 £000 £000 £000 £000 £000

Financial liabilities

At 31 March 2016

Payables 269 11,034 1 - - - 11,304

Liabilities under unit – linked insurance contracts - 33,067 8,932 18,798 64,254 778,960 904,011

Term assurance provision 127 - - - - - 127

Financial liabilities 396 44,101 8,933 18,798 64,254 778,960 915,442

The maturity of the Company’s financial liabilities is all within six months or on demand for 2017 and 2016.


(c) Capital management

The Group maintains an efficient capital structure of reserves consistent with the Group’s risk profile and the regulatory and market requirements of its business.

The Group is subject to a number of regulatory capital tests and employs a number of tests to allocate capital and manage risk. Overall, the Group meets all of these requirements and has significant resources and financial strength.

Restrictions on available capital resources

The available capital of B&CE Insurance Limited and B&CE Financial Services Limited is subject to certain restrictions as to its availability to meet capital requirements. In particular for B&CE Insurance Limited, no transfers from the long-term fund can take place without an up to date actuarial valuation.

The unrestricted Group capital held within reserves is generally available to meet any other requirements including meeting the requirements of the life business. However apart from the unrestricted capital of £19.1m (2016: £18.5m) of B&CE Insurance Limited, any transfers of unrestricted capital from other Group companies would be subject to a tax charge. The Directors of each company therefore consider the unrestricted capital to be available to meet requirements of other parts of the Group. It remains the intention of management to ensure that there is adequate capital to exceed the Group’s regulatory requirements. The Group also takes account of the individual capital assessment which considers certain business risks not reflected in the statutory bases.

The Group’s total available capital resources are £132.7m (2016: £111.3m) of which £87.1m (2016: £65.6m) is held by B&CE Insurance Limited and £16.4m (2016: £14.6m) is held by B&CE Financial Services Limited. The capital held by these companies is constrained by regulatory requirements. This means it may not be possible for the capital to be used to provide funding for other Group businesses.

Total Other Group Total Other Group insurance activities total insurance activities total company company reserves reserves 2017 2017 2017 2016 2016 2016 £000 £000 £000 £000 £000 £000

Total available capital resources 87,085 45,650 132,735 65,554 45,751 111,303

Analysis of contract liabilities gross and net of reinsurance

2017 2017 2017 2016 2016 2016 Gross Reinsurance Net Gross Reinsurance Net £000 £000 £000 £000 £000 £000

Unit Linked Insurance 1,032,749 1,048,318 (15,569) 903,552 903,552 -

Other Life Insurance 115 15 100 127 15 112

Health Insurance 461 - 461 271 - 271

Total 1,033,325 1,048,333 (15,008) 903,950 903,567 383

In reporting financial strength, capital and solvency are measured using the regulations prescribed by the Prudential Regulation Authority (‘PRA’) and the Financial Conduct Authority (‘FCA’). These regulatory capital tests are based upon required levels of solvency capital and a series of prudent assumptions in respect of the type of businesses written by the Group.

The Group’s objectives in managing its capital are to:

• maintain financial strength to support existing business; and

• satisfy the requirements of its policyholders, the PRA and the FCA.



57


(c) Capital management (continued)

Movement in capital resources – general and long-term insurance 2017 2016 £m £m

Balance as at 1 April 65.6 75.1

Change in opening balance resulting from adoption of Solvency II 11.7 n/a

Capital transfers - (10.0)

Effect of investment variation 4.5 (1.9)

Effect of EasyBuild AMCs 0.3 2.9

Effect of expenses (administration, claims, acquisition and investment) (0.8) (0.8)

Changes in technical provisions 3.8 0.4

Other (including changes in corporation tax, non-insurance liabilities, and unexplained) 2.0 (0.1)

Balance as at 31 March 87.1 65.6

Solvency position 2017 £m

Own Funds 87.1

SCR 44.1

Solvency Ratio 198%

Note

The Solvency II results are not due to be submitted to the PRA until after the release of the Annual report. As a result, the Solvency II results disclosed above are based on the best estimate of the results at the date of signing the Annual report and may differ to the results published as part of the annual Solvency Financial Condition Report.

Capital resource sensitivities

The capital position is sensitive to changes in market conditions, due to both changes in the value of the assets and the effect that changes in investment conditions may have on the value of the liabilities.

The most significant sensitivities arise from the following risks:

• Expense risk in relation to the costs of acquiring the business within the long-term fund; there is no expense risk in respect of administering the business because this risk has been transferred to B&CE Financial Services Limited.

• Market risk in relation to unit-linked pensions business that would arise if the rate of return on unit funds was less than expected, leading to a reduction in anticipated annual management charges.

• Persistency risk in relation to unit-linked pensions business that would arise if the rate of lapses was higher than expected, leading to a reduction in anticipated annual management charges.

The timing of any impact on capital would depend on the interaction of past experience and assumptions about the future. In general, if experience deteriorates then assumptions relating to future experience would be changed to reflect this. In this way, liabilities would increase in anticipation of future events with an immediate impact on the capital position.

B&CE Financial Services Limited is required to hold sufficient capital to meet the FCA’s capital requirements. Management intends to maintain surplus capital in excess of the minimum capital requirement, determined in accordance with FCA regulations, to absorb changes in both capital and capital requirements. At 31 March 2017, the available capital was substantially in excess of the capital requirement of £0.02m (2016: 790% of the capital requirement of £1.9m).


(d) Fair value estimation

Fair value is the amount for which an asset or liability could be exchanged between willing parties in an arm’s length transaction. Fair values are determined at prices quoted in active markets. In some instances, such price information is not available for all instruments and the Group applies valuation techniques to measure such instruments. These valuation techniques make maximum use of market observable data but in some cases management estimate other than observable market inputs within the valuation model. There is no standard model and different assumptions would generate different results.

To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments into the three levels. An explanation of each level follows underneath the table.

Investments carried at fair value have been categorised using a fair value hierarchy as detailed below:

Level 1 – Quoted price for an identical asset in an active market Inputs to level 1 fair value are quoted prices (unadjusted) in active markets for identical assets. An active market is one in which transactions for the asset occurs with sufficient frequency and volume to provide pricing information on an on-going basis.

Level 2 – Price of a recent transaction for an identical asset The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 – Valuation technique i.e. internal models with significant unobservable market parameters Inputs to level 3 fair values are based on unobservable inputs for the assets at the last measurement date. If all significant inputs required to fair value an instrument are observable then the instrument is included in level 2, if not it is included in level 3. The Group did not have any such instruments.

The following tables present the Group and Company’s assets measured at fair value at 31 March 2017 and at 31 March 2016. No liabilities were measured at fair value at 31 March 2017 or 31 March 2016.

Group

As at 31 March 2017 Level 1 Level 2 Level 3 Total £000 £000 £000 £000

Financial instruments – AFS - 18,186 - 18,186

Financial instruments – FVTPL - 64,362 - 64,362

Total - 82,548 - 82,548

As at 31 March 2016

Financial instruments – AFS 15,975 13,680 - 29,655

Financial instruments – FVTPL 43,564 16,736 - 60,300

Total 59,539 30,416 - 89,955

Company

As at 31 March 2017 Level 1 Level 2 Level 3 Total £000 £000 £000 £000

Financial instruments – AFS - 14,175 - 14,175

As at 31 March 2016

Financial instruments – AFS 11,438 13,680 - 25,118

25. Events after the reporting periodOn 1 April 2017, under an intra-group corporate restructure, People’s Financial Services Limited became the intermediate holding company of B&CE Insurance Limited and B&CE Financial Services Limited.

B&CE Insurance Limited have decided that, from 1 September 2017, EasyBuild will close to further contributions and new members. Instead contributions can be made, and new employees added, to The People's Pension. Following this date, EasyBuild pension savings (including those of EasyBuild members who are no longer contributing) will be transferred to The People's Pension (unless members opt out of the transfer).

For more information:

08457 414142 or 01293 586790

[email protected]

www.bandce.co.uk

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1017B&CE Holdings Limited

Manor Royal, Crawley, West Sussex, RH10 9QP.

Registered in England and Wales No. 377361. To help us improve our service, we may record your call. This is the parent company for the B&CE Group of companies. B&CE Holdings Limited is an appointed representative of B & C E Insurance Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority Ref: 177791, and B & C E Financial Services Limited which is authorised and regulated by the Financial Conduct Authority Ref: 122787.

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