Carphone Warehouse 2015 Annual Report Download - page 121

Download and view the complete annual report

Please find page 121 of the 2015 Carphone Warehouse annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

Dixons Carphone plc Annual Report and Accounts 2014/15
Financial statements
119
20 Retirement and other post-employment benefit obligations
2 Ma
y
2015
£million
29 March
2014
£million
Retirement benefit obligations – UK 486 —
– Nordics 3 —
489 —
The Group operates a defined benefit and a number of defined contribution schemes which were acquired as part of the Dixons
Retail Merger.
The principal scheme which operates in the UK includes a funded defined benefit section whose assets are held in a separate
trustee administered fund. The scheme is valued by a qualified actuary at least every three years and contributions are assessed
in accordance with the actuary’s advice. Since 1 September 2002, the defined benefit section of the scheme has been closed to
new entrants and on 30 April 2010 was closed to future accrual with automatic entry into the defined contribution section being
offered to those active members of the defined benefit section at that time. Membership of the defined contribution section is
offered to eligible employees.
In the Nordics division, the Group operates small funded secured defined benefit pension schemes, which are also closed
to new entrants, with assets held by a life insurance company as well as an unsecured pension arrangement. In addition,
contributions are made to state pension schemes with defined benefit characteristics. There has been a net movement in
the obligation since the Merger and this principally relates to an actuarial loss of £1 million.
a) Defined contribution pension schemes
The pension charge in respect of defined contribution schemes was £20 million (2013/14: £4 million).
b) UK Defined benefit pension scheme – actuarial valuation and assumptions
A full actuarial valuation of the scheme was last carried out as at 31 March 2013 and showed a shortfall of assets compared with
liabilities of £373 million. A ‘recovery plan’ based on this valuation was agreed with the Trustee post the Dixons Retail Merger
such that contributions in respect of the scheme year end of 31 March of £25 million were made in 2014/15, rising to £35 million
for 2015/16. Contributions rise to £47 million by 2024/25. The next triennial valuation will be as at 31 March 2016.
The principal actuarial assumptions as at 31 March 2013 were:
Rate per annum
Discount rate for accrued benefits† – Growth portfolio 5.9%
– Matching portfolio 3.8%
Rate of increase to pensions 0% – 3.8%
Inflation 3.4%
† The discount rate is based on a linear de-risking methodology which assumes the Scheme’s investment strategy switches investments from
growth assets (such as equities) to matching assets (such as bonds) over a period of 30 years from 2013 to 2043 so that in 30 years’ time
the asset portfolio is projected to be 80% invested in matching assets.
At 31 March 2013, the market value of the scheme’s investments was £812 million and, based on the above assumptions,
the value of the assets was sufficient to cover 69% of the benefits accrued to members with the liabilities amounting to
£1,185 million.