Experian 2012 Annual Report Download - page 136

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134 Experian Annual Report 2012 Financial statements
Notes to the Group financial statements continued
34. Retirement benefit assets and obligations
(a) Retirement benefit arrangements
(i) Funded pension arrangements
The Group operates defined benefit and defined contribution pension plans in a number of countries. A defined benefit pension plan defines
an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years
of service and compensation. A defined contribution pension plan defines the amount of contributions that are paid by the Group into an
independently administered fund.
The Group’s principal defined benefit plan is the Experian Pension Scheme which provides benefits for certain UK employees but was closed
to new entrants in the year ended 31 March 2009. The Group provides a defined contribution plan, the Experian Money Purchase Pension Plan,
to other eligible UK employees. Both plans are governed by trust deeds which ensure that their finances and governance are independent from
those of the Group. Employees in the USA and Brazil have the option to join locally provided defined contribution plans. There are no other
material funded pension arrangements.
The Experian Pension Scheme has rules which specify the benefits to be paid and is financed accordingly. A full actuarial funding valuation
of this plan is carried out every three years with interim reviews in the intervening years. The latest full valuation was carried out as at 31 March
2010 by independent, qualified actuaries, Towers Watson Limited, using the projected unit credit method. Under this method of valuation the
current service cost will increase as members approach retirement due to the ageing active membership of the plan. There was a surplus at the
date of the 2010 full actuarial valuation and accordingly no deficit repayment contributions are currently required. The next full valuation will be
carried out as at 31 March 2013.
(ii) Unfunded pension arrangements
The Group has had unfunded pension arrangements in place for a number of years designed to ensure that certain directors and senior
managers in the UK who are affected by the earnings cap are placed in broadly the same position as those who are not. Additionally there
are unfunded arrangements for one current director of the Company and certain former directors and employees of Experian Finance plc.
Certain of these unfunded arrangements in the UK have been secured by the grant of charges to an independent trustee over an independently
managed portfolio of marketable securities owned by the Group. The amount of assets so charged is adjusted periodically to keep the ratio
of assets charged to the discounted value of the accrued benefits secured close to the corresponding ratio in the Experian Pension Scheme.
The value of such assets at 31 March 2012 was US$35m (2011: US$36m) and these are reported as available for sale financial assets (note 30).
Further details of the pension arrangements for directors appear in the audited part of the report on directors’ remuneration.
(iii) Post-retirement healthcare arrangements
The Group operates plans which provide post-retirement healthcare benefits to certain retired employees and their dependant relatives.
The principal plan relates to former employees in the UK and, under this plan, the Group has undertaken to meet the cost of post-retirement
healthcare for all eligible former employees who retired prior to 1 April 1994 and their dependants.
(b) Retirement benefit assets and obligations – disclosures
The disclosures required by IAS 19 , which relate to the Group’s UK defined benefit pension arrangements and post-retirement healthcare
obligations only, are as follows:
(i) Retirement benefit assets/(obligations) recognised in the Group balance sheet
2012
US$m
2011
US$m
Retirement benefit assets/(obligations) - funded plans:
Fair value of funded plans’ assets 957 913
Present value of funded plans’ liabilities (827) (807)
Surplus in the funded plans 130 106
Retirement benefit obligations - unfunded plans:
Present value of unfunded pension obligations (41) (39)
Liability for post-retirement healthcare (12) (12)
Retirement benefit obligations - unfunded plans (53) (51)
Net retirement benefit assets 77 55