Vodafone 2005 Annual Report Download - page 120

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Notes to the Consolidated Financial Statements continued
118 |Financials
32.Pensions continued
Pension disclosures required under SSAP 24
During the year ended 31 March 2005, the total amount charged to the profit and loss account in respect of all the Group’s pensions plans was £95 million (2004:
£79 million, 2003: £95 million), as analysed below:
2005 2004 2003
£m £m £m
Defined benefit schemes:
United Kingdom 31 31 24
Germany 5712
Japan 28 10 32
Other 865
Net pension charge: Defined benefit schemes 72 54 73
Net pension charge: Defined contribution schemes 23 25 22
Total amount charged to the profit and loss account 95 79 95
Below is a summary of the principal assumptions used in calculating the pension cost for the year to 31 March 2005:
UK Germany Japan
%%%
Rate of inflation 2.5 2.0 –
Rate of increase in salaries 4.5 3.0 –(1)
Rate of increase in pensions in payment 2.5 2.0 N/A
Rate of increase in deferred pensions 2.5 – N/A
Rate used to discount liabilities – pre-retirement 6.8 5.5 2.5
Rate used to discount liabilities – post-retirement 5.8 5.5 2.5
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)
2005 2004 2003 2005 2004 2003 2005 2004 2003
£m £m £m £m £m £m £m £m £m
Regular cost 27 23 22 3555812
Interest (credit)/cost (13) (9) (4) 149–12
Variation in regular cost(1) 17 17 6 1(2) (2) 23 118
Total 31 31 24 571228 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 2005 also included £23 million (2004: £nil, 2003: £17 million) in respect of
lump sum redundancy benefits payable through a redundancy programme associated with the retirement plan.
(2) The charge for Japan for the year ended 31 March 2004 includes the pension costs in relation to companies sold during the year for that part of the year prior to their disposal.