BP 2006 Annual Report Download - page 156

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154
41 Pensions and other post-retirement benefits continued
The expected long-term rates of return and market values of the various categories of asset held by the significant defined benefit plans at 31 December
are set out below.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2006 2005 2004
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Expected
long-term
rate of return
Market
value
Expected
long-term
rate of return
Market
value
Expected
long-term
rate of return
Market
value
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
% $ million % $ million % $ million
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
UK pension plans
Equities 7.5 23,631 7.50 18,465 7.50 17,329
Bonds 4.7 3,881 4.25 2,719 4.50 2,859
Property 6.5 1,370 6.50 1,097 6.50 1,660
Cash 3.8 379 3.50 1,001 4.00 459
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
7.0 29,261 7.00 23,282 7.00 22,307
US pension plans
Equities 8.5 6,528 8.50 5,961 8.50 6,043
Bonds 5.0 1,371 4.75 1,079 4.75 1,057
Property 8.0 15 8.00 21 8.00 28
Cash 3.2 41 3.00 256 3.00 55
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
8.0 7,955 8.00 7,317 8.00 7,183
US other post-retirement benefit plans
Equities 8.5 19 8.50 20 8.50 21
Bonds 5.0 7 4.75 8 4.75 9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
7.5 26 7.25 28 7.25 30
Other plans
Equities 7.6 1,158 7.50 991 8.00 933
Bonds 4.6 1,199 4.00 943 4.25 857
Property 4.7 120 5.75 130 5.25 114
Cash 3.0 191 1.50 216 3.50 288
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
5.8 2,668 5.50 2,280 6.00 2,192
The assumed rate of investment return and discount rate have a significant effect on the amounts reported. A one-percentage-point change in these
assumptions for the group’s plans would have had the following effects:
$ million
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
One-percentage point
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Increase Decrease
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Investment return
Effect on pension and other post-retirement benefit expense in 2007 (383) 383
Discount rate
Effect on pension and other post-retirement benefit expense in 2007 (52) 75
Effect on pension and other post-retirement benefit obligation at 31 December 2006 (5,013) 6,433
The assumed US healthcare cost trend rate has a significant effect on the amounts reported. A one-percentage-point change in the assumed US
healthcare cost trend rate would have had the following effects:
$ million
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
One-percentage point
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Increase Decrease
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Effect on US other post-retirement benefit expense in 2007 31 (25)
Effect on US other post-retirement obligation at 31 December 2006 349 (289)