Virgin Media 2010 Annual Report Download - page 216

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
VIRGIN MEDIA INVESTMENTS LIMITED AND SUBSIDIARIES
COMBINED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 11—Employee Benefit Plans (continued)
As a result of the sale of various business operations in prior periods, we have retained the earned pension
and other post-retirement benefits liabilities related to certain employees of those operations. Accordingly, the
information disclosed in the tables above includes amounts relating to liabilities of these employees.
Assumptions
The weighted-average assumptions used to determine benefit obligations were as follows:
December 31,
2010 2009
Discount rate ................................................... 5.50% 5.75%
Rate of compensation increase ..................................... 4.00% 4.00%
The weighted-average assumptions used to determine net periodic benefit costs were as follows:
December 31,
2010 2009
Discount rate ................................................... 5.75% 5.75%
Expected long term rate of return on plan assets ....................... 6.50% 5.92%
Rate of compensation increase ..................................... 4.00% 3.00%
Where investments are held in bonds and cash, the expected long term rate of return is taken to be yields
generally prevailing on such assets at the measurement date. A higher rate of return is expected on equity
investments, which is based more on realistic future expectations than on the returns that have been available
historically. The overall expected long term rate of return on plan assets is then the average of these rates taking
into account the underlying asset portfolios of the pension plans.
Plan Assets
Our pension plan weighted-average asset allocations by asset category and by fair value hierarchy level at
December 31, 2010 and 2009 were as follows (in millions):
December 31, 2010
Fair value hierarchy
Asset category Level 1 Level 2 Level 3 Total
Equity Securities ................................................ £141.3 £ — £— £141.3
Government Bonds .............................................. 111.9 — — 111.9
Corporate Bonds ................................................ 60.9 — — 60.9
Real Estate ..................................................... 4.5 0.7 — 5.2
Hedge Funds ................................................... — 28.5 — 28.5
Cash .......................................................... 3.2 — — 3.2
Total .......................................................... £321.8 £29.2 £— £351.0
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