20 Unallocated divisible surplus.

The participating funds operate with an excess of assets over the amount required to meet the policyholder liabilities.

The nature of benefits for the contracts within these funds is such that the allocation of surpluses between ordinary equity holders and participating policyholders is uncertain. The amount of surplus which has not been allocated at the balance sheet date is classified within liabilities as the unallocated divisible surplus. Adjustments made to comply with FRS 27 are charged to the unallocated divisible surplus.

(XLS:) Unallocated divisible surplus

 

2012
£m

2011
£m

As at 1 January

1,038

1,469

Transferred from the income statement

158

(402)

Actuarial (losses) on defined benefit pension schemes
transferred from the statement of comprehensive income

(41)

(48)

Foreign exchange adjustments

1

Other

(2)

18

As at 31 December

1,153

1,038

It is intended that the with-profits part of the LTF will be managed on the basis that it will remain open to new business and therefore there is no expectation of any distribution from the inherited estate.