BT 2004 Annual Report Download - page 132
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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 2003 and 31 March 2004, based on the valuations at 1 January 2003 and
1 January 2004, respectively, is given below.
Minimum liability, intangible asset and other comprehensive income
2004
£m
2003
£m
Plan assets at fair value 26,675 22,757
Accumulated benefit obligation 31,137 28,551
Minimum liability 4,462 5,794
Net amount recognised at end of year (2,275) (2,497)
Minimum additional liability 2,187 3,297
Intangible asset as at 31 March 2004:
Unrecognised net transition obligation –(2)
Unrecognised prior service cost (79) (103)
Accumulated other comprehensive income 2,108 3,192
Changes in benefit obligation 2004
£m
2003
£m
Benefit obligation at the beginning of the year 30,277 29,097
Service cost 388 453
Interest cost 1,657 1,707
Employees’ contributions 148 156
Additional cost of termination benefits 160
Actuarial movement 1,428 152
Other changes 513
Benefits paid or payable (1,456) (1,361)
Benefit obligation at the end of the year 32,448 30,277
The benefit obligation and pension cost for the main pension scheme were determined using the following
assumptions at 1 January 2002, 2003 and 2004:
2004
per annum
%
2003
per annum
%
2002
per annum
%
Discount rate 5.5 5.6 6.0
Rate of future pay increases 3.6 3.8 4.0
Rate of future pension increases 2.6 2.25 2.5
Contributions expected to be paid to the plan during the next fiscal year are estimated at £290 million.
Changes in scheme assets 2004
£m
2003
£m
Fair value of scheme assets at the beginning of the year 22,757 26,597
Actual return on scheme assets 4,195 (3,255)
Employer’s contributions
a
1,026 607
Employees’ contributions 148 156
Other changes 513
Benefits paid or payable (1,456) (1,361)
Fair value of scheme assets at the end of the year 26,675 22,757
Funded status under US GAAP 2004
£m
2003
£m
Projected benefit obligation in excess of scheme assets (5,773) (7,520)
Unrecognised net obligation at date of initial application of SFAS No. 87
b
–2
Unrecognised prior service costs
c
79 103
Other unrecognised net actuarial losses 3,419 4,918
Net amount recognised under US GAAP (2,275) (2,497)
a
The employer’s contributions for the year ended 31 March 2004 includes special contributions of £362 million paid in December 2003 and £380 million
paid in March 2004 (2003 – £329 million paid in December 2002).
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.
BT Annual Report and Form 20-F 2004131 United States Generally Accepted Accounting Principles