Vodafone 2015 Annual Report Download - page 163

An analysis of net assets/(decit) is provided below for the Group’s largest dened benet pension scheme in the UK, which is a funded scheme.
Following the merger of the Vodafone UK plan and the CWWRP plan on 6 June 2014 the assets and liabilities of the CWW Section are segregated
from the Vodafone Section and hence are reported separately below.
CWW Section1Vodafone Section2
2015 2014 2013 2015 2014 2013 2012 2011
£m £m £m £m £m £m £m £m
Analysis of net assets/(decit):
Total fair value of scheme assets 2,251 1,780 1,827 1,912 1,343 1,328 1,218 1,180
Present value of schemeliabilities (2,085) (1,732) (1,874) (2,133) (1,677) (1,647) (1,444) (1,127)
Net assets/(decit) 166 48 (47) (221) (334) (319) (226) 53
Net assets/(decit) are analysed as:
Assets3166 48 – – – – – 53
Liabilities – – (47) (221) (334) (319) (226) –
Notes:
1 Cable & Wireless Worldwide Retirement Plan until 6 June 2014.
2 Vodafone UK plan until 6 June 2014.
3 Pension assets are deemed to be recoverable and there are no adjustments in respect of minimum funding requirements as future economic benets are available to the Company either in the
form of future refunds or, for plans still open to benet accrual, in the form of possible reductions in future contributions.
Duration of the benet obligations
The weighted average duration of the dened benet obligation at 31 March 2015 is 22.7 years (2014: 21.7 years; 2013: 21.4 years).
Fair value of pension assets
2015 2014
£m £m
Cash and cash equivalents 97 65
Equity investments:
With quoted prices in an active market 1,489 1,318
Without quoted prices in an active market 154 102
Debt instruments:
With quoted prices in an active market 2,567 1,320
Property:
With quoted prices in an active market 7 7
Without quoted prices in an active market 12 13
Derivatives:1
With quoted prices in an active market 99 495
Without quoted prices in an active market – 46
Annuity policies – Without quoted prices in an active market 531 476
Total 4,956 3,842
Note:
1 Derivatives include collateral held in the form of cash.
The schemes have no direct investments in the Group’s equity securities or in property currently used by the Group.
Each of the plans manages risks through a variety of methods and strategies including equity protection, to limit downside risk in falls in equity
markets, ination and interest rate hedging and, in the CWW Section of the Vodafone UK plan, a substantial insured pensioner buy-in policy.
The actual return on plan assets over the year to 31 March 2015 was £897 million (2014: £48 million).
Sensitivity analysis
Measurement of the Group’s dened benet retirement obligation is sensitive to changes in certain key assumptions. The sensitivity analysis below
shows how a reasonably possible increase or decrease in a particular assumption would, in isolation, result in an increase or decrease in the present
value of the dened benet obligation as at 31 March 2015.
Rate of ination Rate of increase in salaries Discount rate Life expectancy
Decrease by 0.5%
£m
Increase by 0.5%
£m
Decrease by 0.5%
£m
Increase by 0.5%
£m
Decrease by 0.5%
£m
Increase by 0.5%
£m
Increase by 1 year
£m
Decrease by 1 year
£m
(Decrease)/increase in present value
of dened obligation (474) 507 (29) 27 623 (584) 127 (128)
The sensitivity analysis may not be representative of an actual change in the dened benet obligation as it is unlikely that changes in assumptions
would occur in isolation of one another. In presenting this sensitivity analysis, the change in the present value of the dened benet obligation has
been calculated on the same basis as prior years using the projected unit credit method at the end of the reporting period, which is the same as that
applied in calculating the dened benet obligation liability recognised in the statement of nancial position.
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Annual Report 2015
161