Vodafone 2004 Annual Report Download - page 109

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Annual Report 2004 Vodafone Group Plc
107
Pension disclosures required under SSAP 24
During the year ended 31 March 2004, the total amount charged to the profit and loss account in respect of all the Group’s pensions plans was £79 million
(2003: £95 million, 2002: £64 million), as analysed below:
2004 2003 2002
£m £m £m
Defined benefit schemes:
United Kingdom 31 24 24
Germany 712 14
Japan 10 32 6
Other Countries 654
Net pension charge: Defined benefit schemes 54 73 48
Net pension charge: Defined contribution schemes 25 22 16
Total amount charged to the profit and loss account 79 95 64
Below is a summary of the principal assumptions used in calculating the pension cost for the year to 31 March 2004:
UK Germany Japan
%%%
Rate of inflation 2.5 1.5 –
Rate of increase in salaries 4.5 3.5 –(1)
Rate of increase in pensions in payment 2.5 1.5 N/A
Rate of increase in deferred pensions 2.5 – N/A
Rate used to discount liabilities – pre-retirement 7.0 6.0 1.8
Rate used to discount liabilities – post-retirement 6.0 6.0 1.8
Notes:
(1) Rate of increase in salaries in Japan is calculated in line with company specific experience where benefits are salary related.
The components of the total pension costs of the three principal defined benefit schemes were as follows:
UK Germany Japan(2)
2004 2003 2004 2003 2004 2003
£m £m £m £m £m £m
Regular cost 23 22 55812
Interest (credit)/cost (9) (4) 4912
Variation in regular cost(1) 17 6(2) (2) 118
Total 31 24 712 10 32
Notes:
(1) The variation in regular cost was calculated by amortising the shortfall at the date of the last formal valuation or review over the future working lives of members on a percentage of pensionable salary basis.
For the purposes of determining the UK SSAP 24 variation in regular cost, a review was undertaken as at 31 March 2003 to reflect the impact of investment market movements. The charge for Japan in the
year ended 31 March 2003 also included £17 million in respect of lump sum redundancy benefits payable through a redundancy programme associated with the retirement plan.
(2) The charge for Japan includes the pension costs in relation to companies sold during the year for that part of the year prior to their disposal.