Vodafone 2016 Annual Report Download - page 143

Overview Strategy review Performance Governance Financials Additional information
Vodafone Group Plc
Annual Report 2016
141
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 scheme is in the UK. For further details see “Critical accounting judgements and key
sources of estimation uncertainty” 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. The return on plan assets, in excess of interest income, is also taken to other comprehensive income.
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 settlements. The interest cost less the expected interest income 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.
Cumulative actuarial gains and losses at 1 April 2004, the date of transition to IFRS, were recognised in the statement of nancial position.
The Group contributions to dened contribution pension plans are charged to the income statement as they fall due.
Background
At 31 March 2016 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
2016 2015 2014
£m £m £m
Dened contribution schemes 163 155 124
Dened benet schemes 44 40 34
Total amount charged to income statement (note 25) 207 195 158