BT 2000 Annual Report Download - page 109

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VII Pension costs (continued)
The information required to be disclosed in accordance with SFAS No. 132 concerning the funded status of the main scheme at
31 March 1999 and 31 March 2000, based on the valuations at 1 January 1999 and 1 January 2000, respectively, is given below.
2000
£m
1999
£m
Changes in bene®t obligation
Bene®t obligation at the beginning of the year 27,158 23,513
Service cost 498 387
Interest cost 1,459 1,653
Employees' contributions 171 163
Additional cost of termination bene®ts 263 279
Actuarial movement (a) 2,992 2,361
Other changes 21 25
Bene®ts paid or payable (1,538) (1,223)
Bene®t obligation at the end of the year 31,024 27,158
2000
£m
1999
£m
Changes in scheme assets
Fair value of scheme assets at the beginning of the year 25,120 22,666
Actual return on scheme assets 5,619 3,050
Employers' contributions (b) 483 439
Employees' contributions 171 163
Other changes 21 25
Bene®ts paid or payable (1,538) (1,223)
Fair value of scheme assets at the end of the year 29,876 25,120
2000
£m
1999
£m
Funded status under US GAAP
Projected bene®t obligation in excess of scheme assets (1,148) (2,038)
Unrecognised net obligation at date of initial application of SFAS No. 87 (c) 158 210
Unrecognised prior service costs (d) 175 199
Other unrecognised net actuarial gains (2,001) (1,039)
Accrued pension costs under US GAAP (2,816) (2,668)
(a) In the year ended 31 March 2000, the actuarial movement is signi®cant mainly due to revised mortality assumptions being employed in the year.
The actuarial movement in the year ended 31 March 1999 is signi®cant due to the decline in the discount rates used to calculate the bene®t obligation
as a result of the fall in long-term interest rates in 1998.
(b) The employers' contributions for the year ended 31 March 2000 include a special contribution of £230 million paid on 31 March 2000 (1999 ± £200 million).
(c) The unrecognised net obligation at the date of initial application is being amortised over 15 years from 1 April 1988.
(d) Unrecognised prior service costs on scheme bene®t improvements, are being amortised over periods of 15 or 16 years commencing in the years of the
introduction of the improvements.
The bene¢t obligation for the main pension scheme was determined using the following assumptions at 1 January 1999 and
1 January 2000:
2000
per annum
%
1999
per annum
%
Discount rate 5.5 5.5
Rate of future pay increases 4.8 4.8
The determination also took into account requirements in the scheme as to future pension increases.
United States Generally Accepted Accounting Principles
108 Annual report and Form 20-F