BOC Report and accounts 2005 - Alle jaarverslagen

Notes to the financial statements 103
8. Pensions and other retirement benefits
a) UK GAAP Group
The Group operates a number of pension schemes throughout the world.The larger schemes are self-administered and the schemes’ assets are held
independently of the Group’s finances. Pension costs are assessed in accordance with the advice of independent, professionally qualified actuaries.
Contributions to funded defined benefit schemes are based on advice from independent actuaries using actuarial methods, the objective of which is
to provide adequate funds to meet pension obligations as they fall due. For the two largest schemes, in the UK and US, the dates of the latest actuarial
reviews are 31 March 2002 and 1 January 2004 respectively.
In South Africa, under the Pension Funds Second Amendment Act 2001, surpluses in pension funds have to be used in a manner specified in
Regulations to the Act to improve current and former members’ benefits before the employer can obtain any benefit from the surpluses. Consequently,
it is considered unlikely that the company will obtain any benefit from the surpluses in the South African schemes.Therefore, in accordance with FRS17,
the surpluses at 30 September 2005 have been written off in the statement of total recognised gains and losses.
In Europe, company contributions to the main scheme in respect of current service are currently payable at a rate of 13.8 per cent of payroll. In the
year ended 30 September 2005 the company made additional contributions of £36 million to this scheme in order to reduce the funding valuation deficit.
The level of additional contributions for the year to 30 September 2006 is expected to be up to 20 per cent higher than in 2005.
In the Americas, company contributions to the main pension plan remain suspended as the plan continues to be in surplus.
In Africa, company contributions were payable at rates ranging from 11 per cent to 21 per cent of payroll and are expected to remain at that level for
the year to 30 September 2006.
In Asia/Pacific, company contributions to the main scheme were payable at rates ranging from 9 per cent to 20 per cent of payroll and are expected
to remain at that level for the year to 30 September 2006.
Some of the defined benefit schemes, including the UK scheme, are closed to new members. It is therefore expected that under the projected unit
method prescribed by FRS17 the contribution rate in respect of current service will increase as the members of the schemes approach retirement.
The most recent actuarial funding valuations have been updated by independent qualified actuaries, in order to assess the liabilities of the schemes at
30 September 2005 for the purposes of FRS17. Scheme assets are stated at their market value at 30 September 2005.
Main assumptions for FRS17 purposes Europe Americas Africa Asia/Pacific
2005
Rate of increase in salaries 4.4% 3.8% 5.5% 3.5%
Rate of increase in pensions in payment 2.9% – 4.5% 2.4%
Discount rate 5.0% 5.4% 8.5% 5.4%
Inflation 2.9% 2.6% 4.5% 2.5%
2004
Rate of increase in salaries 4.4% 3.8% 7.5% 3.6%
Rate of increase in pensions in payment 2.9% – 5.3% 2.4%
Discount rate 5.5% 5.7% 10.0% 6.1%
Inflation 2.9% 2.5% 5.5% 2.5%
2003
Rate of increase in salaries 4.1% 3.75% 7.5% 3.5%
Rate of increase in pensions in payment 2.6% – 4.8% 2.5%
Discount rate 5.3% 5.9% 10.0% 6.2%
Inflation 2.6% 2.5% 5.0% 2.5%
Date of latest actuarial funding valuation 31 Mar 02 01 Jan 04 30 Jun 04 31 Dec 03
The assumptions used for the US health care benefits for FRS17 purposes are a discount rate of 5.4 per cent (2004: 5.7 per cent, 2003: 5.9 per cent) and
an ultimate health care cost trend rate of 4.5 per cent (2004: 4.5 per cent, 2003: 4.5 per cent).
Contributions to non defined benefit schemes in the year were £15.9 million (2004: £15.6 million, 2003: £12.0 million) and are included in note 6 c).