The Financials

In order to maintain maximum financial flexibility, since 2002 claims in payment have only been increased for inflation retrospectively after confirming the Plan’s continuing financial strength. The above liability value includes a provision that ad hoc indexing of claims that have been in force for 24 months or more as of Dec. 31, 2010, be indexed for CPI since the later of Dec. 31, 2009, or the date they passed 24 months on claim. Reflecting the very modest level of inflation recently, this change has increased Plan liabilities by $0.6 million.

The Plan has adopted a biennial schedule for valuations; accordingly, the next formal actuarial valuation of the Plan is scheduled for Dec. 31, 2012.

The following table shows the funding position of the LTD Plan for the last four years.