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BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
ANNUAL REPORT 2013
2. ACCOUNTING POLICIES
(CONTINUED)
2.3 Summary of significant accounting policies (continued)
k) Employee benefits
The Group has both a defined benefit plan and a defined contribution plan for its employees.
Defined benefit plan
A defined benefit plan is a pension plan that defines an amount of pension benefit to be provided, usually as a function of
one or more factors such as age, years of service or compensation. The Credit Union operates a defined benefit pension plan
for its eligible employees, which requires contributions to be made to a separately administered fund.
The asset or liability recognised in the statement of financial position in respect of defined benefit pension plans is the
present value of the defined benefit obligation at the reporting date minus the fair value of plan assets, together with
adjustments for unrecognised actuarial gains/losses and past service cost. The defined benefit obligation is calculated
annually by independent actuaries using the projected unit credit method with a full valuation done every three years.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited
to income over the expected average remaining service lives of the related employees. Past service costs are recognised
immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for
a specified period of time (the vesting period). In this case, past service costs are amortised on a straight-line basis over the
vesting period.
The amount charged to the statement of income consists of current service cost, interest cost, the expected return on any
plan assets and actuarial gains and losses.
Defined contribution plan
A defined contribution plan is a pension plan under which fixed contributions are paid into a separate entity (a fund), with
no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee
benefits relating to employee service in the current and prior periods. Capita Financial Services Inc. operates a defined
contribution plan for its eligible employees.
For the defined contribution plan, the Group makes contributions to an administered pension plan. Once the contributions
have been paid, the Group has no further payment obligation. The regular contributions constitute net periodic costs for
the year in which they are due and as such are included in staff costs. The Group’s contributions to the defined contribution
pension plan are charged to the statement of income in the year to which they relate.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided. A liability is recognised for other amounts expected to be paid if the Group has a present legal or constructive
obligation to pay these amounts as a result of past service provided by the employee and the obligation can be estimated
reliably.
l) Taxation
Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the
extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
Current tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the statement of financial position date.
Deferred tax
Deferred tax is provided for all temporary differences arising between the tax bases of assets and liabilities and their carrying
values for financial reporting purposes using the rates that have been enacted or substantially enacted by the statement of
financial position date and are expected to apply when the asset is realised or liability settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which
the asset can be utilised.
Notes to the Consolidated Financial Statements
For the year ended March 31, 2013, with comparative figures for 2012
(Expressed in Barbados dollars)
