Full Annual Report - Inchcape

Section
Three
Financial
statements
5 Pensions and other post-retirements benefits continued
The rate of increase in healthcare cost is 5.5% (2008 – 5.5%) per annum but with higher increases in the first 10 years.
Assumptions regarding future mortality experience are set based on published statistics and experience. For the UK schemes, the
average life expectancy of a pensioner retiring at age 65 is 22.6 years (2008 – 20.9 years) for current pensioners and 25.0 years
(2008 – 22.5 years) for current non pensioners. Most of the overseas schemes only offer a lump sum on retirement and therefore
mortality assumptions are not applicable.
The expected return on plan assets is based on the weighted average expected return on each type of asset (principally equities
and bonds). The overall expected return on plan assets is determined based on the expected real rates of return on equities and
expected yields on bonds applicable to the period over which the obligation is to be settled.
The asset / (liability) recognised in the consolidated statement of financial position is determined as follows:
2009
£m
United Kingdom Overseas Total
Present value of funded obligations (807.4) (628.6) (33.4) (43.9) (840.8) (672.5)
Fair value of plan assets 736.1 697.7 34.7 29.6 770.8 727.3
(Deficit) / surplus in funded obligations (71.3) 69.1 1.3 (14.3) (70.0) 54.8
Irrecoverable element of pension surplus – (43.6) (0.3) (0.3) (0.3) (43.9)
Net (deficit) / surplus in funded obligations (71.3) 25.5 1.0 (14.6) (70.3) 10.9
Present value of unfunded obligations (2.3) (2.7) (2.2) (2.2) (4.5) (4.9)
(73.6) 22.8 (1.2) (16.8) (74.8) 6.0
2008
£m
2009
£m
2008
£m
2009
£m
2008
£m
The net pension asset / (liability) is analysed as follows:
Schemes in surplus – 49.4 0.8 – 0.8 49.4
Schemes in deficit (73.6) (26.6) (2.0) (16.8) (75.6) (43.4)
(73.6) 22.8 (1.2) (16.8) (74.8) 6.0
The amounts recognised in the consolidated income statement are as follows:
2009
£m
United Kingdom Overseas Total
Current service cost (3.0) (4.8) (2.6) (2.0) (5.6) (6.8)
Past service cost (0.2) – – – (0.2) –
Interest expense on plan liabilities (38.0) (42.0) (0.9) (1.1) (38.9) (43.1)
Expected return on plan assets 42.6 47.1 1.9 2.3 44.5 49.4
1.4 0.3 (1.6) (0.8) (0.2) (0.5)
The actual gain on plan assets amounts to £48.8m (2008 – actual loss of £67.6m).
The totals in the previous table are analysed as follows:
2009
£m
2008
£m
Cost of sales Distribution costs Administrative expenses Total
2008
£m
2009
£m
Current service cost (0.6) (0.4) (1.2) (0.9) (3.8) (5.5) (5.6) (6.8)
Past service cost – – – – (0.2) – (0.2) –
(0.6) (0.4) (1.2) (0.9) (4.0) (5.5) (5.8) (6.8)
Interest expense on
plan liabilities (38.9) (43.1)
Expected return on plan assets 44.5 49.4
(0.2) (0.5)
2008
£m
2009
£m
2009
£m
2008
£m
2008
£m
2009
£m
2009
£m
2008
£m
2008
£m
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