Experian 2009 Annual Report Download - page 128

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126 Experian Annual Report 2009
28. Retirement benet assets/obligations (continued)
Changes in the market value of the plans’ assets
2009 2008
US$m US$m
At 1 April 1,045 1,069
Differences on exchange (261) 11
Additions through business combinations – 6
Expected return on plans’ assets 69 76
Actuarial losses on assets (236) (101)
Contributions paid by the Group 14 21
Contributions paid by employees 4 6
Contributions paid from outside the Group – 3
Benets paid (40) (46)
At 31 March 595 1,045
The actual return on plans’ assets was a loss of US$167m (2008: loss of US$25m).
Contributions expected to be paid to the Experian dened benet pension plans during the next nancial year are US$11m by
the Group and US$3m by employees.
Actuarial assumptions
The valuations used at 31 March 2009 have been based on the most recent actuarial valuations, updated by Watson Wyatt
Limited to take account of the requirements of IAS 19. The principal actuarial assumptions used to calculate the present value
of the dened benet obligations were as follows:
2009 2008
% %
Rate of ination 3.4 3.6
Rate of increase for salaries 5.2 5.4
Rate of increase for pensions in payment and deferred pensions 3.4 3.6
Rate of increase for medical costs 6.5 6.5
Discount rate 6.9 6.9
The main nancial assumption is the real discount rate, i.e. the excess of the discount rate over the rate of ination. If this
assumption increased/decreased by 0.1%, the dened benet obligations would decrease/increase by approximately US$11m
and the annual current service cost would remain unchanged. The discount rate is based on the market yields on high quality
corporate bonds of appropriate currency and term to the dened benet obligations. In the case of the Group’s principal plan,
the Experian Pension Scheme, the obligations are primarily in sterling and have a maturity of some 18 years.
The IAS 19 valuation assumes that mortality will be in line with the PA92 series year of use tables with medium cohort
mortality improvement projections and an age rating of +1 year. This includes an explicit allowance for anticipated future
improvements in life expectancy (medium cohort projections).
The average expectation of life on retirement at age 65 in normal health is assumed to be:
2009 2008
years years
For a male currently aged 65 21.3 21.2
For a female currently aged 65 24.2 24.1
For a male currently aged 50 22.2 22.2
For a female currently aged 50 25.0 25.0
An increase in assumed life expectancy of 0.1 years would increase the dened benet obligations at 31 March 2009 by
approximately US$3m.
The assumptions in respect of discount rate, salary increases and mortality all have a signicant effect on the IAS 19
accounting valuation. Changes to these assumptions in the light of prevailing conditions may have a signicant impact on
future valuations.
The IAS 19 valuation, in respect of post-retirement healthcare benets, additionally assumes a rate of increase for medical
costs. If this assumption increased/decreased by 1.0% per annum the obligation would increase/decrease by US$1m and the
current service cost would remain unchanged.
Notes to the Group nancial statements continued
Financial statements