National Grid 2014 Annual Report Download - page 138

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29. Actuarial information on pensions and other post-retirement benefits continued
Actuarial assumptions
The Company has applied the following financial assumptions in assessing DB liabilities:
UK pensions US pensions US other post-retirement benefits
2014
%
2013
%
2012
%
2014
%
2013
%
2012
%
2014
%
2013
%
2012
%
Discount rate14.3 4.3 4.8 4.8 4.7 5.1 4.8 4.7 5.1
Rate of increase in salaries23.6 4.1 4.0 3.5 3.5 3.5 3.5 3.5 3.5
Rate of increase in RPI33.3 3.4 3.2 n/a n/a n/a n/a n/a n/a
Initial healthcare cost trend rate n/a n/a n/a n/a n/a n/a 8.0 8.0 8.0
Ultimate healthcare cost trend rate n/a n/a n/a n/a n/a n/a 5.0 5.0 5.0
1. The discount rates for pension liabilities have been determined by reference to appropriate yields on high-quality corporate bonds prevailing in the UK and US debt markets at the
reportingdate.
2. A promotional scale has also been used where appropriate. The UK assumption stated is that relating to service prior to 1 April 2013. The UK assumption for the rate of increase in salaries
forservice after this date is 2.5%.
3. This is the key assumption that determines assumed increases in pensions in payment and deferment in the UK only. The assumptions for the UK were 3.3% (2013: 3.4%; 2012: 3.2%) for
increases in pensions in payment and 3.3% (2013: 3.4%; 2012: 3.2%) for increases in pensions in deferment.
2014 2013 2012
UK
years
US
years
UK
years
US
years
UK
years
US
years
Assumed life expectations for a retiree age 65
Today
Males 22.9 20.6 22.7 19.5 22.5 19.4
Females 25.4 22.9 25.2 21.4 25.0 21.3
In 20 years
Males 25.2 22.8 25.0 21.0 24.9 20.9
Females 27.8 24.7 27.6 22.2 27.5 22.2
Maturity profile of defined benefit obligations
The weighted average duration of the DB obligation for each category of scheme is 16 years for UK pension schemes; 13 years for US
pension schemes and 15 years for US other post-retirement benefits. The forecast timing of benefits payable to scheme members for
each of these categories is shown on a net present value basis in the chart below.
UK Pensions US Pensions US OPEBs
0
50
100
150
200
250
300
350
500
450
550
400
750
800
700
650
600
850
2015 2025 2035 2045 2055 2065 2075 2085
Maturity profile
£m
Notes to the consolidated
financial statements continued
136 National Grid Annual Report and Accounts 2013/14