BP 2008 Annual Report Download - page 164

Financial statements
BP Annual Report and Accounts 2008
Notes on financial statements
38. Pensions and other post-retirement benefits continued
$ million
2007
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 costa492 227 43 132 894
Past service cost 5 10 – – 15
Settlement, curtailment and special termination benefits 36 – – 2 38
Payments to defined contribution plans – 184 – 25 209
Total operating chargeb533 421 43 159 1,156
Analysis of the amount credited (charged) to other finance expense
Expected return on plan assets 2,075 613 2 165 2,855
Interest on plan liabilities (1,198) (425) (190) (390) (2,203)
Other finance income (expense) 877 188 (188) (225) 652
Analysis of the amount recognized in the statement of recognized income and expense
Actual return less expected return on pension plan assets 406 (28) – (76) 302
Change in assumptions underlying the present value of the plan liabilities 513 358 137 607 1,615
Experience gains and losses arising on the plan liabilities (162) (27) 29 (40) (200)
Actuarial gain recognized in statement of recognized income and expense 757 303 166 491 1,717
Movements in benefit obligation during the year
Benefit obligation at 1 January 23,289 7,695 3,300 8,149 42,433
Exchange adjustments 394 – – 917 1,311
Current service costa492 227 43 132 894
Past service cost 5 10 – – 15
Interest cost 1,198 425 190 390 2,203
Curtailment (7) – – – (7)
Settlement (3) – – – (3)
Special termination benefitsc46 – – 2 48
Contributions by plan participants 43 – – 12 55
Benefit payments (funded plans)d(1,085) (580) (5) (182) (1,852)
Benefit payments (unfunded plans)d(3) (37) (184) (379) (603)
Acquisitions – – – 141 141
Disposals (91) – – (29) (120)
Actuarial gain on obligation (351) (331) (166) (567) (1,415)
Benefit obligation at 31 Decembera23,927 7,409 3,178 8,586 43,100
Movements in fair value of plan assets during the year
Fair value of plan assets at 1 January 29,261 7,955 26 2,668 39,910
Exchange adjustments 488 – – 316 804
Expected return on plan assetsae 2,075 613 2 165 2,855
Contributions by plan participants 43 – – 12 55
Contributions by employers (funded plans) 524 97 – 127 748
Benefit payments (funded plans)d(1,085) (580) (5) (182) (1,852)
Acquisitions – – – 101 101
Disposals (91) (12) – (21) (124)
Actuarial gain (loss) on plan assetse406 (28) – (76) 302
Fair value of plan assets at 31 December 31,621 8,045 23 3,110 42,799
Surplus (deficit) at 31 December 7,694 636 (3,155) (5,476) (301)
Represented by
Asset recognized 7,818 989 – 107 8,914
Liability recognized (124) (353) (3,155) (5,583) (9,215)
7,694 636 (3,155) (5,476) (301)
The surplus (deficit) may be analysed between funded and unfunded plans as follows
Funded 7,818 978 (29) (263) 8,504
Unfunded (124) (342) (3,126) (5,213) (8,805)
7,694 636 (3,155) (5,476) (301)
The defined benefit obligation may be analysed between funded and unfunded plans as follows
Funded (23,803) (7,067) (52) (3,373) (34,295)
Unfunded (124) (342) (3,126) (5,213) (8,805)
(23,927) (7,409) (3,178) (8,586) (43,100)
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.
bIncluded 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 a restructuring programme in the UK.
dThe benefit payments amount shown above comprises $2,398 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 gain on plan assets as disclosed above.
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