BP 2008 Annual Report Download - page 163

BP Annual Report and Accounts 2008
Notes on financial statements
38. Pensions and other post-retirement benefits continued
$ million
2008
US other post-
UK US retirement
pension pension benefit Other
plans plans plans plans Total
Analysis of the amount charged to profit before interest and taxation
Current service costa448 235 40 128 851
Past service cost 7 74 – 1 82
Settlement, curtailment and special termination benefits 30 – – 12 42
Payments to defined contribution plans – 170 – 25 195
Total operating chargeb485 479 40 166 1,170
Analysis of the amount credited (charged) to other finance expense
Expected return on plan assets 2,094 632 2 194 2,922
Interest on plan liabilities (1,239) (444) (198) (450) (2,331)
Other finance income (expense) 855 188 (196) (256) 591
Analysis of the amount recognized in the statement of recognized income and expense
Actual return less expected return on pension plan assets (6,946) (2,895) (8) (404) (10,253)
Change in assumptions underlying the present value of the plan liabilities 1,570 3 215 214 2,002
Experience gains and losses arising on the plan liabilities (73) (194) 18 70 (179)
Actuarial (loss) gain recognized in statement of recognized income and expense (5,449) (3,086) 225 (120) (8,430)
Movements in benefit obligation during the year
Benefit obligation at 1 January 23,927 7,409 3,178 8,586 43,100
Exchange adjustments (6,408) – – (628) (7,036)
Current service costa448 235 40 128 851
Past service cost 7 74 – 1 82
Interest cost 1,239 444 198 450 2,331
Curtailment – – – (3) (3)
Settlement (3) – – (3) (6)
Special termination benefitsc33 – – 18 51
Contributions by plan participants 42 – – 12 54
Benefit payments (funded plans)d(1,131) (767) (4) (203) (2,105)
Benefit payments (unfunded plans)d(2) (52) (176) (419) (649)
Actuarial (gain) loss on obligation (1,497) 191 (233) (284) (1,823)
Benefit obligation at 31 Decembera16,655 7,534 3,003 7,655 34,847
Movements in fair value of plan assets during the year
Fair value of plan assets at 1 January 31,621 8,045 23 3,110 42,799
Exchange adjustments (7,447) – – (314) (7,761)
Expected return on plan assetsae 2,094 632 2 194 2,922
Contributions by plan participants 42 – – 12 54
Contributions by employers (funded plans) 6 362 – 130 498
Benefit payments (funded plans)d(1,131) (767) (4) (203) (2,105)
Actuarial loss on plan assetse(6,946) (2,895) (8) (404) (10,253)
Fair value of plan assets at 31 December 18,239 5,377 13 2,525 26,154
Surplus (deficit) at 31 December 1,584 (2,157) (2,990) (5,130) (8,693)
Represented by
Asset recognized 1,682 – – 56 1,738
Liability recognized (98) (2,157) (2,990) (5,186) (10,431)
1,584 (2,157) (2,990) (5,130) (8,693)
The surplus (deficit) may be analysed between funded and unfunded plans as follows
Funded 1,682 (1,734) (31) (354) (437)
Unfunded (98) (423) (2,959) (4,776) (8,256)
1,584 (2,157) (2,990) (5,130) (8,693)
The defined benefit obligation may be analysed between funded and unfunded
plans as follows
Funded (16,557) (7,111) (44) (2,879) (26,591)
Unfunded (98) (423) (2,959) (4,776) (8,256)
(16,655) (7,534) (3,003) (7,655) (34,847)
aThe costs of managing the plan’s investments are treated as being part of the investment return, the costs of administering our pensions plan benefits are generally included in current service cost and
the costs of administering our other post-retirement benefit plans are included in the benefit obligation.
blncluded within production and manufacturing expenses and distribution and administration expenses.
cThe charge for special termination benefits represents the increased liability arising as a result of early retirements occurring as part of restructuring programmes.
dThe benefit payments amount shown above comprises $2,697 million benefits plus $57 million of plan expenses incurred in the administration of the benefit.
eThe actual return on plan assets is made up of the sum of the expected return on plan assets and the actuarial loss on plan assets as disclosed above.
At 31 December 2008 reimbursement balances due from or to other companies in respect of pensions amounted to $455 million reimbursement
assets (2007 $496 million) and $61 million reimbursement liabilities (2007 $72 million). These balances are not included as part of the pension
liability, but are reflected elsewhere in the group balance sheet.
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