BT 2012 Annual Report Download - page 131

128 Financial statements
Notes to the consolidated financial statements
Management of the scheme
BT Pension Scheme Trustees Limited (the Trustee) has been appointed by BT to administer and manage the scheme on behalf of the members in
accordance with the terms of the Trust Deed of the scheme and relevant legislation. Under the terms of the BTPS Trust Deed there are nine Trustee
directors all of whom are appointed by BT. The chairman of the Trustee is appointed after consultation with and with the agreement of the relevant
trade unions who are also responsible for nominating four directors to act as representatives of the members. Of the remaining four directors, two
will normally hold senior positions within the group, and two will normally hold (or have held) senior positions in commerce or industry. Subject to
there being an appropriately qualified candidate at least one of the Trustee directors should be a current pensioner or deferred pensioner of the
BTPS. Trustee directors are appointed for a three-year term, but are then eligible for re-appointment.
Further details of the governance of the BTPS, its financial position, performance of its investments and a summary of member benefits are
available in the BTPS Annual Report typically published by the Trustee in May or June each year.
Accounting under IAS 19
Group income statement
The expense or income arising from all group pension arrangements recognised in the group income statement is shown below:
2012 2011 2010
Year ended 31 March £m £m £m
Recognised in the income statement before specific items
Current service cost:
– defined benefit plans 267 297 206
– defined contribution plans 126 119 98
Total operating expense 393 416 304
Specific items (note 9)
Interest expense on pension plan liabilities 2,092 2,323 2,211
Expected return on pension plan assets (2,289) (2,244) (1,932)
Net interest (income) expense included in specific items (197) 79 279
Total recognised in the income statement 196 495 583
The service cost that will be recognised in the income statement in 2013 relating to defined benefit plans is estimated to be around £30m lower
than in 2012. The net pension interest within specific items is expected to be a credit of around £30m for 2013, a decrease of around £165m,
mainly due to lower expected returns on assets more than offsetting the higher asset values.
Group statement of comprehensive income
Actuarial gains and losses arise on both defined benefit liabilities and plan assets due to changes in assumptions compared with the start of the
year and actual experience being different from those assumptions. These are recognised in full in the group statement of comprehensive income
in the year in which they arise.
20. Retirement benefit plans continued
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