National Grid 2008 Annual Report Download - page 677

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 4758
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 150
Description: EXHIBIT 15.1
0/7346.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/346/7*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 4758
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 150 Description: EXHIBIT 15.1
0/7346.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/346/7*
Table of Contents
158
Notes to the consolidated financial statements continued
National Grid plc
31. Actuarial information on pensions and other post-retirement benefits continued
The principal actuarial assumptions used were:
The assumed life expectations for a retiree at age 65 are:
Sensitivities analysed – all other assumptions held constant:
Assumed healthcare cost trend rates have a significant impact on the amounts recognised in the income statement. A one
percentage point change in assumed healthcare cost trend rates would have the following effects:
The history of experience adjustments is as follows:
UK pensions US pensions US other post-retirement benefits
2008 2007 2006 2008 2007 2006 2008 2007 2006
% % % % % % % % %
Discount rate
(
i
)
6.6 5.4 4.9 6.5 5.8 6.0 6.5 5.8 6.0
Ex
p
ected return on
p
lan assets 6.4 6.1 5.8 7.9 8.3 8.3 7.6 8.3 8.3
Rate of increase in salaries (ii) 4.6 4.2 3.9 4.0 4.1 4.1 4.0 4.1 4.1
Rate of increase in
p
ensions in
p
a
y
ment 3.8 3.3 3.0
–
–
–
n/a n/a n/a
Rate of increase in
p
ensions in deferment 3.7 3.2 2.9
–
–
–
n/a n/a n/a
Rate of increase in Retail Price Index or
e
q
uivalent 3.7 3.2 2.9 3.0 2.5 3.0 n/a n/a n/a
Initial healthcare cost trend rate n/a n/a n/a n/a n/a n/a 10.0 10.0 10.0
Ultimate healthcare cost trend rate n/a n/a n/a n/a n/a n/a 5.0 5.0 5.0
(i) The discount rates for pension liabilities have been determined by reference to appropriate yields prevailing in the UK and US debt markets at the balance sheet date.
(ii) A promotional age-related scale has also been used where appropriate.
2008 2007
UK US UK US
y
ears
y
ears years years
Toda
y
:
Males 20.9 18.2 20.1 17.6
Females 23.1 20.5 22.5 20.2
In 20
y
ears:
Males 23.2 18.2 21.2 17.6
Females 25.4 20.5 23.6 20.2
Change in
pension and other Change in
post-retirement obligation annual pension cost
2008 2007 2008 2007
£m £m £m £m
0.1% increase (2007: 0.1% decrease) in discount rate 251 260 4 4
0.5% increase in lon
g
-term rate of increase in salaries 131 139 58
Increase of one
y
ear to life ex
p
ectations at a
g
e 60 588 557 44
2008 2007 2006
£m £m £m
Increase
Effect on the a
gg
re
g
ate of the service cost and interest cost 16 14 15
Effect on defined benefit obli
g
ation 251 170 186
Decreas
e
Effect on the aggregate of the service cost and interest cost (13) (12) (12)
Effect on defined benefit obli
g
ation
(
214
)
(
147
)
(
161
)
2008 2007 2006 2005 2004
£m £m £m £m £m
Details of ex
p
erience
g
ains/
(
losses
)
for all
p
lans
Present value of funded and unfunded obli
g
ations
(
18,175
)
(
17,253
)
(
17,839
)
(
16,837
)
(
16,405
)
Fair value of plan assets 17,273 15,999 15,909 14,565 13,907
(
902
)
(
1,254
)
(
1,930
)
(
2,272
)
(
2,498
)
Difference between the ex
p
ected and actual return on
p
lan assets
(
i
)
(
911
)
(
81
)
1,521 405 n/a
Ex
p
erience
g
ains on
p
lan liabilities
(
i
)
152 9 192 42 n/a
Actuarial gains/(losses) on plan liabilities (i) 1,343 446 (1,340) (152) n/a
(i) National Grid adopted IAS 19 from 1 April 2004 hence no information has been presented for the year ended 31 March 2004.