Vodafone 2014 Annual Report Download - page 155

26. 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. For further details see “Critical accounting judgements” in note 1
“Basis of preparation” to the consolidated nancial statements.
Accounting policies
For dened benet retirement plans, the difference between the fair value of the plan assets and the present value of the plan liabilities is recognised
as an asset or liability on the statement of nancial position. Scheme liabilities are assessed using the projected unit funding method and applying
the principal actuarial assumptions at the reporting period date. Assets are valued at market value.
Actuarial gains and losses are taken to the statement of comprehensive income as incurred. For this purpose, actuarial gains and losses comprise
both the effects of changes in actuarial assumptions and experience adjustments arising because of differences between the previous actuarial
assumptions and what has actually occurred.
Other movements in the net surplus or decit are recognised in the income statement, including the current service cost, any past service cost
and the effect of any curtailment or settlements. The interest cost less the expected return on assets is also charged to the income statement.
The amount charged to the income statement in respect of these plans is included within operating costs or in the Group’s share of the results
of equity accounted operations, as appropriate.
The Group’s contributions to dened contribution pension plans are charged to the income statement as they fall due.
Cumulative actuarial gains and losses at 1 April 2004, the date of transition to IFRS, were recognised in the statement of nancial position.
Background
At 31 March 2014 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, India, Ireland, Italy, the UK and the United States. Dened contribution pension
schemes are currently provided in Australia, Egypt, Germany, Greece, Hungary, India, Ireland, Italy, the Netherlands, New Zealand, Portugal,
SouthAfrica, Spain and the UK.
Income statement expense
2014
Restated
2013
Restated
2012
£m £m £m
Dened contribution schemes 124 118 113
Dened benet schemes 34 39 9
Total amount charged to income statement (note 25) 158 157 122
Dened benet schemes
The Group’s principal dened benet pension schemes are in the UK (the ‘UK Schemes’), being the Vodafone Group Pension Scheme (‘Vodafone
UK plan’) and the Cable & Wireless Worldwide Retirement Plan (‘CWWRP’). The Vodafone UK plan and the CWWRP plan closed to future
accrual on 31 March 2010 and 30 November 2013, respectively. Until 30 November 2013 the CWWRP allowed employees to accrue a pension
at a rate of 1/85th of their nal salary for each year of service until the retirement age of 60 with a maximum pension of two thirds of nal salary.
Employees contributed 5% of their salary into the scheme. The CWWRP is expected to merge with the Vodafone UK plan during the second quarter
of 2014.
The dened benet plans are administered by Trustee Boards that are legally separated from the Group. The Trustee Board of each pension fund
consists of representatives who are employees, former employees or are independent from the Company. The Board of the pension funds are
required by law to act in the best interest of the plan participants and are responsible for setting certain policies, such as investment and contribution
policies and the governance of the fund.
The dened benet pension schemes expose the Group to actuarial risks such as longer than expected longevity of members, lower than expected
return on investments and higher than expected ination, which may increase the liabilities or reduce the value of assets of the plans.
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