Holiday Inn 2012 Annual Report Download - page 122
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120 IHG Annual Report and Financial Statements 2012
25. Retirement benefits continued
Sensitivities
Changes in assumptions used for determining retirement benefit costs and obligations may have a material impact on the income
statement and the statement of financial position. The main assumptions are the discount rate, the rate of inflation and the assumed
mortality rate. The following table provides an estimate of the potential impact of each of these variables on the principal pension plans.
UK US
Increase/ Increase/
Higher/(lower) (decrease) Higher/(lower) (decrease)
pension cost in liabilities pension cost in liabilities
$m $m $m $m
Discount rate – 0.25% decrease 1.4 20.7 0.2 7.2
– 0.25% increase (1.0) (19.1) (0.2) (6.8)
Inflation rate – 0.25% increase 1.1 17.9 – –
– 0.25% decrease (0.6) (15.8) – –
Mortality rate – one year increase 0.5 8.2 0.3 10.1
A one percentage point increase/(decrease) in assumed healthcare costs trend rate would increase/(decrease) the accumulated post-
employment benefit obligations as at 31 December 2012 by approximately $2.4m (2011 $2.8m).
Pension plans
Post-employment
UK US and other benefits Total
2012 2011 2012 2011 2012 2011 2012 2011
Movement in benefit obligation $m $m $m $m $m $m $m $m
Benefit obligation at 1 January 525 512 233 209 30 27 788 748
Current service cost 5 6 1 1 – – 6 7
Members’ contributions 1 1 – – – – 1 1
Interest expense 25 28 9 10 1 1 35 39
Benefits paid (14) (13) (12) (13) (1) (1) (27) (27)
Curtailment gain – (28) – – – – – (28)
Actuarial loss/(gain) arising in the year 3 22 16 26 (5) 3 14 51
Exchange adjustments 24 (3) – – – – 24 (3)
Benefit obligation at 31 December 569 525 247 233 25 30 841 788
Comprising:
Funded plans 507 471 193 181 – – 700 652
Unfunded plans 62 54 54 52 25 30 141 136
569 525 247 233 25 30 841 788
Pension plans
Post-employment
UK US and other benefits Total
2012 2011 2012 2011 2012 2011 2012 2011
Movement in plan assets $m $m $m $m $m $m $m $m
Fair value of plan assets at 1 January 551 475 133 130 – – 684 605
Company contributions 97 40 10 11 1 1 108 52
Members’ contributions 1 1 – – – – 1 1
Benefits paid (14) (13) (12) (13) (1) (1) (27) (27)
Expected return on plan assets 28 29 9 9 – – 37 38
Actuarial gain/(loss) arising in the year 6 24 9 (5) – – 15 19
Exchange adjustments 26 (5) – 1 – – 26 (4)
Fair value of plan assets at 31 December 695 551 149 133 – – 844 684
Notes to the Group Financial Statements continued