Experian 2011 Annual Report Download - page 142

Download and view the complete annual report

Please find page 142 of the 2011 Experian 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 164

  • 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
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

140 Experian Annual Report 2011
Notes to the Group nancial statements continued
34. Retirement benet assets and obligations (continued)
(vii) Future contributions
Contributions expected to be paid to Experian dened benet pension plans during the year ending 31 March 2012 are US$13m by the Group and
US$4m by employees.
(viii) Actuarial assumptions
The valuations used at 31 March 2011 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: 2011
%
2010
%
Rate of ination 3.5 3.7
Rate of increase for salaries 4.5 4.7
Rate of increase for pensions in payment - element based on the RPI 3.4 3.6
Rate of increase for pensions in payment and deferred pensions - element based on the CPI 2.8 n/a
Rate of increase for medical costs 7.5 7.7
Expected return on plan assets 6.6 7.0
Discount rate 5.6 5.5
The principal nancial assumption is the real discount rate, being the excess of the discount rate over the rate of ination. 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. If the
discount rate increased/decreased by 0.1%, the dened benet obligations would decrease/increase by approximately US$16m and the annual
current service cost would remain unchanged.
The expected return on plan assets has been determined by considering the mix of returns anticipated on the assets held in accordance with
the current investment policy. Expected yields on xed interest securities are based on gross redemption yields as at the balance sheet date.
Expected returns on equities and other assets reect the long-term real rates of return experienced in the respective markets.
Mortality assumptions - average life expectation on retirement at age 65 in normal health: 2011
years
2010
years
For a male currently aged 65 22.2 21.3
For a female currently aged 65 23.4 24.2
For a male currently aged 50 23.4 22.2
For a female currently aged 50 24.7 25.0
The valuation assumes that mortality will be in line with the standard SAPS S1 All tables based on each member’s year of birth, with a 95%
adjustment factor applied to the underlying mortality rates for males and a 106% adjustment factor for females and projected in accordance with
the Continuous Mortality Investigation ('CMI') 2009 Core Projection Model with a long-term improvement rate of 1% per annum. This includes a
specic allowance for anticipated future improvements in life expectancy (CMI projections). An increase in assumed life expectancy of 0.1 years
would increase the dened benet obligations at 31 March 2011 by approximately US$3m.
The valuation in respect of post-retirement healthcare benets additionally assumes a rate of increase for medical costs. If this rate increased/
decreased by 1.0% per annum, the obligation would increase/decrease by US$1m and the nance expense would remain unchanged.
(ix) Assets of the Group’s dened benet plans at fair value 2011
US$m
2011
%
2010
US$m
2010
%
Equities 506 55 432 52
Fixed interest securities 353 39 317 39
Other 54 6 73 9
913 100 822 100