Annual report & review 2006 - Shopic.com

Summary financial statements
18 Pensions
The pension entitlements of employees, including executive directors, arise under defined benefit and defined contribution schemes
and are secured by contributions by the Group to separately administered pension funds in the Republic of Ireland, Northern
Ireland and Great Britain. The pension charge for the year is €11.3 million (2005: €13.8 million) comprising a current service cost
of €12.4 million (2005: €13.5 million), past service costs of €0.1 million (2005: €nil) in respect of defined benefit schemes and
defined contribution schemes cost of €0.3 million (2005: €0.3 million) and is reduced by gains on curtailments and settlements of
€1.5 million (2005: €nil). The net finance cost resulting from the scheme deficits is €2.0 million (2005: €2.4 million).
The funding requirements in relation to the Group’s defined benefits schemes are assessed in accordance with the advice of
independent qualified actuaries and valuations are prepared at triennial intervals. Annual contributions are based on the advice of
professionally qualified actuaries using the aggregate funding and projected unit methods. The most recent actuarial valuations for
the Group’s schemes were: Republic of Ireland – 29 March 2004; Northern Ireland – 5 April 2003; Budgens Great Britain – 31 March
2003 and Londis Great Britain – 1 May 2005. The actuarial valuation reports are available for inspection by members of the schemes
at the registered office of the company but are not available for public inspection.
The latest agreed contribution rates for the Group’s material schemes are: Republic of Ireland – 24.4 per cent of pensionable salaries;
Northern Ireland – 22.7 per cent of pensionable salaries and Budgens Great Britain – 15 per cent of members’ salaries.
The Londis scheme has been closed to new members since August 1991.
An updated actuarial valuation for the purposes of FRS 17 was carried out as at 31 December 2006 by a qualified independent actuary
in respect of Group pension schemes. The main financial assumptions used in the valuation were:
2006 2005
Rate of increase in wages and salaries 4.00% 4.00%
Rate of increase in pensions in payment 3.00% 2.90%
Discount rate used for scheme liabilities 4.90% 4.40%
Inflation assumption 2.50% 2.50%
The long term expected rate of return at the balance sheet dates were:
2006 2005
Equities 6.70% 6.40%
Property 4.00% 5.30%
Bonds 5.70% 3.70%
Others 4.30% 3.50%
The following amounts at the balance sheet dates were measured in accordance with requirements of FRS 17:
2006 2005
€m €m
Total market value of assets 215.4 178.2
Present value of schemes liabilities (279.2) (270.0)
FRS 17 deficit in the schemes (63.8) (91.8)
Related deferred tax at 12.5 to 30 per cent 11.4 16.1
Net pension liability (52.4) (75.7)
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Musgrave Group Plc Annual Report & Review 2006