ECCB 2022-2023 Annual Report and Financial Statements

Eastern Caribbean Central Bank Notes to the Financial Statements For the year ended 31 March 2023 (Expressed in Eastern Caribbean dollars)

22. Pension asset (continued)

The largest propor tion of the Plan’s assets is invested in debt instruments. Overseas equities in developed markets and USD denominated bonds have quoted prices.

The Plan’s assets are invested based on a strategy agreed with the Trustees. There are no asset -liability matching strategies used by the Plan.

Sensitivity analysis

The calculation of the defined benefit obligation is sensitive to the assumptions used. The following table summarises the sensitivity of the defined benefit obligation to changes in the assumptions used:

2023 Impact on defined benefit obligation

Change in assumption

Increase in assumption

Decrease in assumption

$

$

Discount rate

1% 1%

(11,419,000)

14,082,000 (5,173,000)

Future salary increases

5,816,000 1,119,000

Life expectancy

1 year

-

2022 Impact on defined benefit obligation

Change in assumption

Increase in assumption

Decrease in assumption

$

$

Discount rate

1% 1%

(12,358,000)

15,341,000 (5,868,000)

Future salary increases

6,653,000 1,118,000

Life expectancy

1 year

-

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.

These sensitivities were calculated by re-calculating the defined benefit obligations using the revised assumptions. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the year) has been applied as when calculating the pension plan asset recognised within the statement of financial position.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.

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