BT 2003 Annual Report Download - page 134
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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 2002 and 31 March 2003, based on the valuations at 1 January 2002 and
1 January 2003, respectively, is given below.
Minimum liability, intangible asset and other comprehensive income
2003
£m
Plan assets at fair value 22,757
Accumulated benefit obligation 28,551
Minimum liability 5,794
Net amount recognised at end of year (2,497)
Minimum additional liability 3,297
Intangible asset as at 31 March 2003:
Unrecognised net transition obligation (2)
Unrecognised prior service cost (103)
Accumulated other comprehensive income 3,192
Changes in benefit obligation 2003
£m
2002
£m
Benefit obligation at the beginning of the year 29,097 31,184
Service cost 453 564
Interest cost 1,707 1,739
Employees’ contributions 156 180
Additional cost of termination benefits 60 140
Actuarial movement 152 (3,428)
Other changes 13 27
Benefits paid or payable (1,361) (1,309)
Benefit obligation at the end of the year 30,277 29,097
Changes in scheme assets 2003
£m
2002
£m
Fair value of scheme assets at the beginning of the year 26,597 29,031
Actual return on scheme assets (3,255) (2,355)
Employers’ contributions
a
607 1,023
Employees’ contributions 156 180
Other changes 13 27
Benefits paid or payable (1,361) (1,309)
Fair value of scheme assets at the end of the year 22,757 26,597
Funded status under US GAAP 2003
£m
2002
£m
Projected benefit obligation in excess of scheme assets (7,520) (2,500)
Unrecognised net obligation at date of initial application of SFAS No. 87
b
254
Unrecognised prior service costs
c
103 127
Other unrecognised net actuarial (gains) losses 4,918 (324)
Net amount recognised under US GAAP (2,497) (2,643)
a
The employers’ contributions for the year ended 31 March 2003 includes special contributions of £200 million paid on 11 December 2002 and
£129 million paid on 12 December 2002 (2002 – £300 million paid on 21 November 2001 and £300 million paid on 4 December 2001).
b
The unrecognised net obligation at the date of initial application is being amortised over 15 years from 1 April 1988.
c
Unrecognised prior service costs on scheme benefit improvements are being amortised over periods of 15 or 16 years commencing in the years
of the introduction of the improvements.
The benefit obligation for the main pension scheme was determined using the following assumptions at 1 January
2002 and 1 January 2003:
2003
per annum
%
2002
per annum
%
Discount rate 5.6 6.0
Rate of future pay increases 3.8 4.0
Rate of future pension increases 2.25 2.5
The accumulated benefit obligation at 31 March 2003 was £28,551 million (2002 – £27,127 million).
United States Generally Accepted Accounting Principles
BT Annual Report and Form 20-F 2003 133