BT 2009 Annual Report Download - page 124

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ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS – NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
122 BT GROUP PLC ANNUAL REPORT & FORM 20-F
29. Retirement benefit plans continued
The financial assumptions used to measure the net pension obligation of the BTPS at 31 March 2009 are as follows:
Real rates (per annum) Nominal rates (per annum)
2009 2008 2007 2009 2008 2007
%%%%%%
Rate used to discount liabilities 3.84 3.24 2.28 6.85 6.85 5.35
Average future increases in wages and salaries – 0.75a0.75a2.90 4.28a3.77a
Average increase in pensions in
payment and deferred pensions – – – 2.90 3.50 3.00
Inflation – average increase in retail price index – – – 2.90 3.50 3.00
aThere is a short-term reduction in the real salary growth assumption to 0.5% for the first three years.
The average life expectancy assumptions, after retirement at 60 years of age, are as follows:
2009 2008
Number of Number of
years years
Male in lower pay bracket 24.8 22.8
Male in higher pay bracket 27.1 25.2
Female 27.7 25.7
Future improvement every 10 years 1.0 1.0
Amounts recognised in respect of defined benefit schemes
The net pension (obligation) asset is set out below:
2009 2008
Present Present
value Asset value Asset
Assets of liabilities (obligation) Assets of liabilities (obligation)
£m £m £m £m £m £m
BTPS 29,227 (33,070) (3,843) 37,331 (34,444) 2,887
Other schemes 126 (256) (130) 117 (225) (108)
29,353 (33,326) (3,973) 37,448 (34,669) 2,779
Deferred tax asset (liability) 1,103 (778)
Net pension (obligation) asset (2,870) 2,001
Amounts recognised in the income statement in respect of the group’s pension schemes are as follows:
2009 2008 2007
£m £m £m
Current service cost (including defined contribution schemes) 544 626 643
Total operating charge 544 626 643
Expected return on pension scheme assets (2,621) (2,448) (2,292)
Interest on pension scheme liabilities 2,308 2,028 1,872
Net finance income (313) (420) (420)
Total amount charged to the income statement 231 206 223
FINANCIAL STATEMENTS