Net deficits after tax on Go-Ahead’s bus defined benefit pension schemes have fallen by £45.4m for the year to 2 July 2016.

According to the group's latest financial report, deficits fell from £47.6m to £2.2m in the period. The pre-tax deficit consisted of estimated liabilities of £765.8m (2015: £718.7m) less assets of £763.1m (2015: £659.2m).

The percentage of assets held in higher risk, return seeking assets was 48 per cent (2015: 51%).

For the majority of bus employees, the group operates one main pension scheme, the Go-Ahead Group Pension Plan, which consists of a funded defined benefit scheme and a defined contribution section.

The defined contribution section of the Go-Ahead Plan is not contracted-out of the State Second Pension Scheme. It is now closed to new entrants and has been replaced by a workplace saving scheme, which is also a defined contribution pension scheme. The expense recognised for the defined contribution section of the Go-Ahead Plan is £9.9m (2015: £11.3m), being the contributions paid and payable. The expense recognised for the workplace saving scheme is £2.8m (2015: £1.9m) being the contributions paid and payable.

The defined benefit section of the Go-Ahead Plan is contracted-out of the State Second Pension Scheme and provides benefits based on a member's final salary. The assets of the scheme are held in a separate trustee-administered fund. Contributions to this section are assessed in accordance with the advice of an independent qualified actuary. The defined benefit section of The Go-Ahead Group Pension Plan has been closed to new entrants and closed to future accrual.

The investment strategy of the Go-Ahead Plan, which aims to meet liabilities as they fall due, is to invest plan assets in a mix of equities, other return seeking assets and liability driven investments to maximise the return on plan assets and minimise risks associated with lower than expected returns on plan assets. Trustees are required to regularly review investment strategy.

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