Experian 2010 Annual Report Download - page 140

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Experian Annual Report 2010 Financial statements138
Notes to the Group nancial statements (continued)
30. Retirement benet obligations (continued)
(vii) Amounts recognised in the Group retained earnings reserve
2010
US$m
2009
US$m
Total charge/(credit) to Group income statement 11 (7)
Actuarial losses recognised within other comprehensive income 28 202
Total charge to Group retained earnings reserve 39 195
At the balance sheet date, cumulative actuarial losses of US$169m (2009: US$141m) had been recognised in the Group retained
earnings reserve, of which US$81m (2009: US$81m) related to losses in respect of Home Retail Group plans recognised prior to
the demerger.
(viii) Future contributions
Contributions expected to be paid to Experian dened benet pension plans during the year ending 31 March 2011 are US$11m
by the Group and US$4m by employees.
(ix) Actuarial assumptions
The valuations used at 31 March 2010 have been based on the most recent actuarial valuations, updated by Towers Watson
Limited to take account of the requirements of IAS 19. The assumptions for discount rate, salary increases and mortality, used to
calculate the present value of the dened benet obligations, all have a signicant effect on the accounting valuation. Changes
to these assumptions in the light of prevailing conditions may have a signicant impact on future valuations.
Principal actuarial assumptions:
2010
%
2009
%
Rate of ination 3.7 3.4
Rate of increase for salaries 4.7 5.2
Rate of increase for pensions in payment and deferred pensions 3.6 3.4
Rate of increase for medical costs 7.7 6.5
Discount rate 5.5 6.9
The principal nancial assumption is the real discount rate, i.e. the excess of the discount rate over the rate of ination. If this
rate increased/decreased by 0.1%, the dened benet obligations would decrease/increase by approximately US$16m 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 benet 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.
Mortality assumptions - average life expectation on retirement at age 65 in normal health:
2010
years
2009
years
For a male currently aged 65 21.3 21.3
For a female currently aged 65 24.2 24.2
For a male currently aged 50 22.2 22.2
For a female currently aged 50 25.0 25.0
The 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). An increase in assumed life expectancy of 0.1 years would increase the dened
benet obligations at 31 March 2010 by approximately US$4m.
The valuation in respect of post-retirement healthcare benets additionally assumes a rate of increase for medical costs. If this
rate of increase increased/decreased by 1.0% per annum the obligation would increase/decrease by US$1m and the current
service cost and associated nance expense would remain unchanged.