BOC Report and accounts 2005 - Alle jaarverslagen

110 The BOC Group plc Annual report and accounts 2005 Notes to the financial statements
8. Pensions and other retirement benefits continued
The weighted-average assumptions used to determine the benefit obligation are as follows:
Europe Americas Africa Asia/Pacific
At 30 September 2005
Discount rate 4.9% 5.0% 8.5% 6.0%
Expected return on all plan assets 7.0% 6.8% 9.9% 7.0%
Rate of compensation increase 4.2% 3.5% 5.5% 3.5%
At 30 September 2004
Discount rate 5.75% 6.1% 10.0% 6.1%
Expected return on all plan assets 7.75% 8.0% 12.0% 7.1%
Rate of compensation increase 4.5% 3.75% 7.5% 3.5%
The weighted-average assumptions used to determine the net benefit cost are as follows:
Europe Americas Africa Asia/Pacific
At 30 September 2005
Discount rate 5.75% 6.1% 10.0% 6.1%
Expected return on all plan assets 7.75% 8.0% 12.0% 7.1%
Rate of compensation increase 4.5% 3.75% 7.5% 3.5%
At 30 September 2004
Discount rate 5.2% 5.8% 10.0% 6.2%
Expected return on all plan assets 7.6% 8.0% 12.0% 7.6%
Rate of compensation increase 4.0% 3.75% 7.5% 3.5%
The Group presently expects its contributions to its pension plans and post retirement medical plans to be up to 20 per cent higher in 2006 than the
amounts contributed in 2005.
The following benefit payments, which reflect future service, as appropriate, are expected to be paid:
Total pension Other
Europe Americas Africa Asia/Pacific benefits benefits 2
£ million £ million £ million £ million £ million £ million
Year ending 30 September
2006 65.0 12.8 4.2 10.6 92.6 2.9
2007 68.2 12.1 4.3 11.4 96.0 2.8
2008 71.4 12.5 4.5 12.2 100.6 2.8
2009 75.4 12.4 4.7 13.0 105.5 2.7
2010 79.6 12.1 4.9 14.2 110.8 2.7
2011 – 2015 471.4 58.9 28.3 87.9 646.5 13.6
For the post retirement medical benefits plan at 30 September 2005, the initial health care cost trend rates for valuing the medical benefits and drug
benefits post age 65 were 10.0 per cent (2004: 9.0 per cent) and 2.5 per cent (2004: 3.2 per cent) respectively.The rates for valuing post age 65 medical
benefits are assumed to reduce gradually to 4.5 per cent in 2013 (2004: 4.5 per cent in 2011).The rates for valuing drug benefits post age 65 are assumed
to reduce gradually to 0.55 per cent in 2013 (2004: 0.65 per cent in 2011). For valuing pre age 65 medical and drug benefits, a blended health care trend
rate of 10.0 per cent was used for 30 September 2005 (2004: 9.0 per cent).This blended rate was assumed to reduce gradually to 4.5 per cent in 2013
(2004: 4.5 per cent in 2011).
Pensionable benefits Other benefits 2
2005 2004 2003 2005 2004 2003
£ million £ million £ million £ million £ million £ million
Service cost net of employees’ contributions 65.2 67.4 53.0 1.5 1.7 1.8
Interest cost on projected benefits obligation 130.4 114.0 108.7 2.5 2.6 3.1
Expected return on assets (165.7) (157.4) (166.2) – – –
Amortisation of net transition asset (1.5) (2.9) (14.8) – – –
Amortisation of prior service cost/(credit) 3 2.4 3.1 46.4 (0.3) (0.5) (0.5)
Amortisation of net loss/(gain) 18.9 14.8 (1.6) 0.2 0.3 0.3
Cost of special termination benefits – 0.7 0.9 – – –
Curtailment/settlement (0.6) 0.6 – – (0.4) –
Net periodic pension cost 49.1 40.3 26.4 3.9 3.7 4.7
2. Other benefits relate to post retirement medical benefits.
3. In 2003 the amortisation of pension prior service cost includes £43.2 million in respect of a settlement of litigation from which the company will derive no future economic benefit.
It is estimated that a one per cent change in the weighted average health care costs trend would have the following effects on the accumulated benefit
obligation and net periodic pension cost at 30 September 2005:
One percentage point
Accumulated benefit obligation 3.8 (3.6)
Net periodic pension cost 0.5 (0.5)
Increase
Decrease