BOC Report and accounts 2005 - Alle jaarverslagen

108 The BOC Group plc Annual report and accounts 2005 Notes to the financial statements
8. Pensions and other retirement benefits continued
Americas Americas
Europe pensions health care Africa Asia/Pacific Total
Movement in (deficit)/surplus during the year £ million £ million £ million £ million £ million £ million
Year to 30 September 2005
(Deficit)/surplus in scheme at 1 October (444.3) 103.1 (46.4) – 5.6 (382.0)
Movement in the year:
Current service cost (48.7) (10.1) (1.5) (2.2) (8.2) (70.7)
Past service cost – – – – – –
Curtailments/settlements – – – – – –
Contributions 71.3 1.6 2.4 2.1 7.7 85.1
Other finance income 4.5 13.4 (2.5) 2.2 0.8 18.4
Actuarial (loss)/gain (37.9) 17.8 4.5 (1.7) 2.0 (15.3)
Exchange adjustment (0.1) 3.2 (1.0) (0.4) 0.6 2.3
(Deficit)/surplus in scheme at 30 September (455.2) 129.0 (44.5) – 8.5 (362.2)
Year to 30 September 2004
(Deficit)/surplus in scheme at 1 October (444.6) 79.2 (50.5) – 3.8 (412.1)
Movement in the year:
Current service cost (47.4) (10.1) (1.5) (2.4) (7.7) (69.1)
Past service cost (0.5) – – – – (0.5)
Curtailments/settlements – 1.6 2.8 – – 4.4
Contributions 71.6 – 2.9 2.3 8.7 85.5
Other finance income 2.7 12.7 (2.6) 2.3 1.0 16.1
Actuarial (loss)/gain (26.1) 26.8 (1.8) (2.2) – (3.3)
Exchange adjustment – (7.1) 4.3 – (0.2) (3.0)
(Deficit)/surplus in scheme at 30 September (444.3) 103.1 (46.4) – 5.6 (382.0)
b) UK GAAP parent company
The company accounts for pension costs in accordance with FRS17 on retirement benefits. In accordance with the standard, the company treats
contributions to defined benefit schemes as if they were contributions to a defined contribution plan.This is because the underlying assets and liabilities of
the defined benefit schemes cover a number of the Group’s UK undertakings and cannot readily be split between each undertaking on a consistent and
reliable basis.
The pension cost recognised in the company’s accounts is the total of company contributions payable to Group UK pension schemes in the year.
The assets of all Group UK pension schemes are held independently of the Group’s finances.The largest schemes are self-administered.
c) US GAAP
For the purposes of US GAAP, the pension costs of the largest schemes have been reclassified in the following tables in accordance with the requirement
of SFAS132.The changes in projected benefit obligation, plan assets and details of the funded status of these retirement plans, together with the changes in
the accumulated other post-retirement benefit obligations of the Group’s US business, are given below.The measurement date for UK and US pension
plans is 30 June and the measurement date for the Australian and South African plans is 30 September.The difference between the UK and US GAAP
information disclosed in note 8a) and c) is included in note 30.
Investment strategy for the schemes is generally set by their respective trustee or fiduciary, after taking advice from their investment advisers,
and in consultation with the company.The strategy reflects the funding position of the schemes, and a careful assessment of the risks inherent over
the long term in various asset classes.The assets of the schemes are diversified by asset class, by investment manager and by geography, in order to
reduce risk. Strategy is reviewed periodically.
At 30 June 2005 the measurement date for SFAS132 reporting, the target asset allocation and actual asset allocation of the main UK scheme was:
2005 2004
Target Actual Actual
Equity securities 68% 69% 72%
Debt securities 18% 17% 19%
Real estate 14% 13% 8%
Cash 0% 1% 1%
In the US, the fiduciary invests in short-term bonds to broadly cash match the liabilities that are expected to fall due within three years.The balance of the
plan’s assets is currently invested in equities. Following this policy, the actual asset allocations of the plan at 30 June 2005 were as follows:
2005 2004
Equity securities 84.9% 77.5%
Debt securities 15.1% 22.5%
The company establishes the long-term expected rate of return on the schemes’ assets by developing a long-term rate of return assumption for each
asset class, taking into account such factors as the market yield on bond investments of appropriate duration, and the expected risk premium for other
asset classes, based on long-term historical trends.A single, long-term return assumption is then calculated as a weighted average return, based on the
expected returns for each asset class.