HSBC 2003 Annual Report Download - page 252

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
250
assumptions used were a discount rate of 8 per cent per annum and average salary increases of 4 per cent
per annum.
The HSBC Bank (UK) Pension Scheme, The HSBC Group Hong Kong Local Staff Retirement Benefits
Scheme, the HSBC Bank USA Pension Plan and the Household International Retirement Plan cover 41 per
cent (2002: 37 per cent; 2001: 42 per cent) of HSBC’ s employees.
The pension cost for defined contribution schemes, which cover 34 per cent (2002: 38 per cent; 2001:
41 per cent) of HSBC’ s employees, was US$165 million (2002: US$152 million; 2001: US$144 million).
(ii) FRS 17 Retirement Benefits
At 31 December 2003 the assumptions used to calculate scheme liabilities for HSBC’ s main defined benefit
pension schemes under FRS 17 are:
Discount
rate
Inflation
assumption
Rate of increase
for pensions in
payment and
deferred
pension
Rate of pay
increase
%%%%
United Kingdom ................................................... 5.5 2.5 2.5 3.0
Hong Kong ........................................................... 5.5 n/a n/a 4.5
United States ........................................................ 6.25 2.5 n/a 3.75
Jersey ................................................................... 5.5 2.5 2.5 4.25
Mexico ................................................................. 10.75 5.0 5.0 7.5
Brazil ................................................................... 11.30 5.0 5.0 5.11
France .................................................................. 5.25 2.0 2.0 3.5
Other .................................................................... 3.5-6.25 1.5-2.0 0-1.5 2.5-3.0
The variation in discount rates between countries reflects the impact of local economic conditions.
At 31 December 2002 the assumptions used to calculate scheme liabilities for HSBC’ s main defined benefit
pension schemes under FRS 17 were:
Discount
rate
Inflation
assumption
Rate of increase
for pensions in
payment and
deferred
pension
Rate of pay
Increase
%%%%
United Kingdom ................................................... 5.6 2.25 2.25 2.75
Hong Kong ........................................................... 5.5 n/a n/a 4.5
United States ........................................................ 6.75 2.5 n/a 3.75
Jersey ................................................................... 5.6 2.25 2.25 4.0
Mexico ................................................................. 10.78 5.0 5.0 7.62
Brazil ................................................................... 10.25 5.0 5.0 6.05
France .................................................................. 5.5 2.0 2.0 3.5
Other .................................................................... 3.75-6.75 1.5-2.0 0-1.5 2.5-3.0