HSBC 2015 Annual Report Download - page 369

HSBC HOLDINGS PLC
367
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
HSBC expects to make $458m of contributions to defined benefit pension plans during 2016. Benefits expected to be paid from
the plans to retirees over each of the next five years, and in aggregate for the five years thereafter, are as follows:
Benefits expected to be paid from plans
2016 2017 2018 2019 2020 2021-2025
$m $m $m $m $m $m
The principal plan1 1,006 1,040 1,075 1,109 1,204 6,425
Other plans1 482 466 476 511 530 2,692
1 The duration of the defined benefit obligation is 17.0 years for the principal plan under the disclosure assumptions adopted (2014: 19.8 years) and
13.9 years for all other plans combined (2014: 14.2 years).
Fair value of plan assets by asset classes
31 December 2015 31 December 2014
Value
Quoted
market price
in active
market
No quoted
market price
in active
market
Thereof
HSBC1Value
Quoted
market price
in active
market
No quoted
market price
in active
market
Thereof
HSBC1
$m $m $m $m $m $m $m $m
The principal plan
Fair value of plan assets 32,670 29,370 3,300 513 35,244 31,355 3,889 930
–
equities 5,730 4,990 740
–
5,502 4,557 945
–
–
bonds 22,704 22,704
–
–
22,965 22,965
–
–
–
derivatives 1,011
–
1,011 513 1,369 52 1,317 930
–
other 3,225 1,676 1,549
–
5,408 3,781 1,627
–
Other plans
Fair value of plan assets 8,754 7,882 872 148 9,580 6,390 3,190 (13)
–
equities 2,434 1,900 534 12,534 1,778 756 11
–
bonds 5,719 5,458 261 26,376 4,109 2,267 7
–
derivatives 7
–
7 1 (100) (8) (92) (107)
–
other 594 524 70 144 770 511 259 76
1 The fair value of plan assets includes derivatives entered into with HSBC Bank plc as detailed in Note 41.
Post-employment defined benefit plans’ principal actuarial financial assumptions
HSBC determines the discount rates to be applied to its obligations in consultation with the plans’ local actuaries, on the basis
of current average yields of high quality (AA-rated or equivalent) debt instruments with maturities consistent with those of the
defined benefit obligations.
Key actuarial assumptions for the principal plan
Discount
rate
Inflation
rate
Rate of
increase for
pensions
Rate of
pay increase
Interest
credit rate
%%% % %
UK
At 31 December 2015 3.70 3.20 3.00 3.70 n/a
At 31 December 2014 3.70 3.20 3.00 3.70 n/a
At 31 December 2013 4.45 3.60 3.30 4.10 n/a
Mortality tables and average life expectancy at age 65 for the principal plan
Mortality
table
Life expectancy at age 65 for
a male member currently:
Life expectancy at age 65 for
a female member currently:
Aged 65 Aged 45 Aged 65 Aged 45
UK
At 31 December 2015 SAPS S1123.6 25.0 24.9 26.7
At 31 December 2014 SAPS S1123.6 25.2 25.0 26.9
1 Self-administered Pension Scheme (‘SAPS’) Light Table with a multiplier of 1.01 for male pensioners and 1.02 for female pensioners. Improvements are
projected in accordance with Continuous Mortality Investigation (‘CMI’) core projection model 2015 (2014: CMI 2014) with a long-term rate of
improvement of 1.25% pa.