Aviva 2009 Annual Report Download - page 235

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Performance review
Aviva plc Notes to the consolidated financial statements continued
Corporate responsibility
Annual Report and Accounts 2009
Governance
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
47 – Pension obligations continued
(iii) Investments in Group-managed funds and insurance policies
Plan assets include investments in Group-managed funds in the consolidated statement of financial position of £101 million
(2008: £99 million, 2007: £150 million) in the UK scheme, and insurance policies with other Group companies of £157 million
and £1,351 million
(2008: £150 million and £1,402 million, 2007: £143 million and £1,025 million) in the UK and Dutch schemes
respectively. The Dutch insurance policies are considered non-transferable under the terms of IAS 19 and so have been treated
as other obligations to staff pension schemes within provisions (see note 46).
The treatment of the relevant parts of the financial statements is as follows:
Plan assets – The treatment of these funds and policies in the consolidated statement of financial position is described above.
Expected rates of return – Where the relevant insurance policies are in segregated funds with specific asset allocations, their
expected rates of return are included in the appropriate line in the table in section (ii) above.
Pension expense – To avoid double-counting of investment income on scheme assets and the assets backing the underlying
policies, adjustments have been made to the former in the tables in section (iv) below.
(iv) Pension expense
As noted above, plan assets in the UK and Dutch schemes include insurance policies with other Group companies. To avoid
double-counting of investment income on scheme assets and the assets backing the underlying policies, adjustments have been
made to the former as shown in the tables below.
The total pension expense for these schemes comprises:
Recognised in the income statement
2009 2008
£m £m
Current service cost
Past service cost
Gains on curtailments
Gains on settlements
(131)
(25)
38
11
(162)
(1)
(3)
—
Total pension cost charged to net operating expenses (107) (166)
Expected return on scheme assets 466 706
Less: Income on insurance policy assets accounted for elsewhere (see (iii) above) (58) (64)
408 642
Interest charge on scheme liabilities (591) (585)
(Charge)/credit to investment income (183) 57
Total charge to income (290) (109)
Recognised in the statement of comprehensive income
2009 2008
£m £m
Expected return on scheme assets (466) (706)
Actual positive/(negative) return on these assets 1,009 (1,245)
Actuarial gains/(losses) on scheme assets 543 (1,951)
Less: losses on insurance policy assets accounted for elsewhere (see (iii) above) 18 58
Actuarial gains/(losses) on admissible assets 561 (1,893)
Experience gains arising on scheme liabilities 77 105
Changes in assumptions underlying the present value of the scheme liabilities (1,778) 859
Actuarial losses recognised in other comprehensive income (1,140) (929)
The loss arising from changes in assumptions in 2009 reflects the impact of lower discount rates for liabilities across all schemes
and higher pension and salary increase assumptions in the UK and Netherlands, together with the strengthening of mortality
assumptions in Ireland.
The cumulative amount of actuarial gains and losses on the pension schemes recognised in other comprehensive income since
1 January 2004 (the date of transition to IFRS) is a loss of £2,230 million at 31 December 2009
(2008: loss of £1,090 million) .
Financial statements IFRS