Aer Lingus 2013 Annual Report Download - page 125

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123
(a) Funded
The Group operates a defined benefit scheme for qualifying employees and former employees of its operation in North America. Under the
scheme, employees are entitled to retirement benefits comprising a lump sum on retirement representing 50% of final average
compensation, plus a pension calculated as 1% of final average compensation for each year of membership, on reaching retirement age of
65. Retirement benefits are reduced for service of less than 20 years. The scheme has 114 members (2012: 119). Both plan participation
and accrual of benefits are frozen.
The Group also operates a defined benefit scheme in respect of two retired Irish former executives of the Group and their spouses.
The risks of these schemes relate primarily to demographic assumptions around mortality and to future asset performance. Future financial
statement liabilities and expense will also be affected by future changes in the rate used to discount the liabilities. The Group seeks to match
the assets it holds in respect of funded schemes to the liabilities of the plans, in terms of currency and maturity, and also seeks to balance
risk and return in making asset investment decisions which match investment yield to expected cash outflows. The Group has not changed
the process used to manage its risks from previous periods.
The movement in the defined benefit obligation in respect of funded arrangements during the year is as follows:
2013
2012
€'000
€'000
At 1 January
14,422
14,481
Interest cost
479
587
Remeasurements – effect of changes in demographic assumptions
34
(2)
Remeasurements – effect of changes in financial assumptions
(822)
(67)
Remeasurements – effect of experience adjustments
(657)
38
Benefits paid
(831)
(615)
Retranslation
(380)
-
At 31 December
12,245
14,422
The movement in the fair value of related plan assets during the year is as follows:
2013
2012
(as restated)
€'000
€'000
At 1 January
9,770
9,405
Expected return on plan assets
342
467
Remeasurements – effect of experience adjustments
654
(155)
Employer contributions
973
613
Benefits paid
(831)
(552)
Taxes paid
(9)
(8)
Retranslation
(329)
-
At 31 December
10,570
9,770
The amounts recognised in the income statement are as follows:
2013
2012
(as restated)
€'000
€'000
Interest cost - recognised in finance expense
479
587
Expected return on plan assets - recognised in finance income
(342)
(467)
Retranslation – recognised in other gains/losses
(51)
-
Total recognised in income statement
86
120
The actual return on plan assets was €0.7 million (2012: €0.9 million)