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MARKS AND SPENCER GROUP PLC 43
11 RETIREMENT BENEFITS continued
B Market value of assets and expected rates of return
The market value of the assets in the Group defined benefit pension schemes and the expected long-term rates of return as at
year end were:
Expected long-term rate of return p.a. Value
2005 2004 2003 2005 2004 2003
%%%£m £m £m
UK equities 8.1 8.1 8.7 1,025.1 974.7 757.0
Overseas equities 8.4 8.6 9.0 1,065.1 1,011.4 777.2
Government bonds 4.8 4.8 4.6 1,249.0 833.4 500.2
Corporate bonds (Triple B or above) 5.5 5.6 5.5 503.3 483.3 561.1
Other 3.8 3.7 4.0 114.3 331.4 43.0
Total market value of assets16.7 6.8 7.3 3,956.8 3,634.2 2,638.5
Present value of scheme liabilities (4,611.0) (4,280.1) (3,888.1)
Pension scheme deficit (654.2) (645.9) (1,249.6)
Unfunded pension plans (2.5) (3.2) (3.9)
Post-retirement healthcare (19.3) (20.4) (24.7)
Total post-retirement liabilities (676.0) (669.5) (1,278.2)
Less: related deferred tax asset 201.8 200.0 382.4
Net post-retirement liability (474.2) (469.5) (895.8)
1The expected return on assets of 6.8% for 2004 was based on the assumption that cash of £306m (included under ‘other’) was invested in government
bonds immediately following the year end.
C Analysis of the amount charged against profits
2005 2004
£m £m
Operating cost
Current service costs 117.2 123.8
Curtailment gain (14.0) –
103.2 123.8
Profit on sale/closure of operations
Curtailment gain on disposal of Financial Services (7.0) –
Finance cost
Expected return on scheme assets (248.9) (196.9)
Interest on scheme liabilities 237.5 212.1
Net finance (income)/charges (11.4) 15.2
Total cost of retirement benefits 84.8 139.0
D Analysis of the amount recognised in the consolidated statement of total recognised gains and losses
2005 2004
£m £m
Actual return less expected return on scheme assets 77.4 401.9
Experience losses arising on scheme liabilities (24.0) (30.3)
Changes in assumptions underlying the present value of scheme liabilities (131.5) (157.8)
Actuarial (loss)/gain recognised in the consolidated statement of total recognised gains and losses (78.1) 213.8