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A5. Post employment benets
We operate a number of dened benet and dened contribution pension plans for our employees.
The Group’s largest dened benet schemes are in the UK.
Background
At 31 March 2013 the Group operated a number of pension plans for the benet of its employees throughout the world, with varying rights and
obligations depending on the conditions and practices in the countries concerned. The Group’s pension plans are provided through both dened
benet and dened contribution arrangements. Dened benet schemes provide benets based on the employees’ length of pensionable service
and their nal pensionable salary or other criteria. Dened contribution schemes offer employees individual funds that are converted into benets
at the time of retirement.
The Group operates dened benet schemes in Germany, Ghana, Ireland, Italy, India, the UK and the US. Dened contribution pension schemes are
currently provided in Australia, Egypt, Germany, Greece, Hungary, Ireland, Italy, Malta, the Netherlands, New Zealand, Portugal, South Africa, Spain,
the UK and the US. The Group’s principal dened benet pension schemes in the UK, being the Vodafone Group Plc Pension Scheme (‘Vodafone
UK plan’) and the Cable & Wireless Worldwide Retirement Plan (‘CWWRP’), are closed to new entrants and additionally the Vodafone UK plan has
been closed to future accrual for existing members since 31 March 2010.
Income statement expense
2013 20122011
£m £m £m
Dened contribution schemes 147 145130
Dened benet schemes 20 (2) 4
Total amount charged to the income statement (note 5) 167 143134
Dened benet schemes
The principal actuarial assumptions used for estimating the Group’s benet obligations are set out below:
201312012120111
% % %
Weighted average actuarial assumptions used at 31 March:
Rate of ination 3.3 3.0 3.1
Rate of increase in salaries 3.8 2.9 2.9
Rate of increase in pensions in payment and deferred pensions 3.3 3.0 3.1
Discount rate 4.34.75.6
Expected rates of return:
Equities –37.48.2
Bonds2–34.2 5.1
Notes:
1 Figures shown represent a weighted average assumption of the individual schemes.
2 For the year ended 31 March 2012 the expected rate of return for bonds consisted of a 4.6% rate of return for corporate bonds (2011: 5.3%) and a 2.6% rate of return for government bonds (2011: 3.6%).
3 Under amendments to IAS 19, “Employee Benets”, that will be adopted by the Group from 1 April 2013, the expected rate of return of pension plan assets will no longer be utilised in determining the pension plan costs
recorded in the consolidated income statement.
The expected return on assets assumptions are derived by considering the expected long-term rates of return on plan investments. The overall
rate of return is a weighted average of the expected returns of the individual investments made in the Group plans. The long-term rates of return
on equities are derived from considering current risk free rates of return with the addition of an appropriate future risk premium from an analysis
of historic returns in various countries. The long-term rates of return on bonds are set in line with market yields currently available at the statement
of nancial position date.
Mortality assumptions used are based on recommendations from the individual scheme actuaries which include adjustments for the experience
of the Group where appropriate. The largest schemes in the Group are the UK schemes. Further life expectancies assumed for the UK schemes
(Vodafone UK plan only in 2012 and 2011) are 23.6/25.3 years (2012: 23.6/24.4 years; 2011: 23.5/24.3 years) for a male/female pensioner
currently aged 65 and 26.8/27.9 years (2012: 27.2/26.7 years; 2011:27.0/26.6 years) from age 65 for a male/female non-pensioner member
currently aged 40.
Measurement of the Group’s dened benet retirement obligations is particularly sensitive to changes in certain key assumptions including the
discount rate. An increase or decrease in the discount rate of 0.5% would result in a £409 million decrease or a £467 million increase in the dened
benet obligation respectively.
Notes to the consolidated nancial statements (continued)
142 Vodafone Group Plc
Annual Report 2013