HSBC 2009 Annual Report Download - page 400

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Note 8
398
Actuarial gains and losses represent experience adjustments on plan assets and liabilities as well as adjustments
arising from changes in actuarial assumptions. Total cumulative actuarial losses recognised in other comprehensive
income at 31 December 2009 were US$4,589 million (2008: losses of US$1,076 million).
The total effect of the limit on plan surpluses recognised within actuarial losses in other comprehensive income
during 2009 was a US$37 million loss excluding exchange differences of US$1 million (2008: US$41 million gain
excluding exchange differences of US$5 million).
Defined benefit healthcare plans
2009 2008
Expected
rates of return1 Value
Expected
rates of return1 Value
% US$m % US$m
Fair value of plan assets ........................................................... 142 128
Equities ................................................................................. 12.2 43 11.6 39
Bonds .................................................................................... 8.7 72 8.0 89
Other ...................................................................................... 4.6 27 – –
Defined benefit obligation ........................................................ (937) (839)
Present value of funded obligations ..................................... (148) (172)
Present value of unfunded obligations ................................. (789) (667)
Unrecognised negative past service cost .................................. (25) (23)
Net liability ............................................................................... (820) (734)
1 The expected rates of return are weighted on the basis of the fair value of the plan assets.
Changes in the present value of defined benefit obligations
2009 2008
US$m US$m
At 1 January ............................................................................................................................................. 839 1,038
Current service cost ................................................................................................................................. 11 19
Interest cost .............................................................................................................................................. 55 65
Contributions by employees .................................................................................................................... 2 2
Actuarial (gains)/losses ........................................................................................................................... 44 2
Benefits paid ............................................................................................................................................ (43) (76)
Reduction in liabilities resulting from curtailments ................................................................................ (22) (31)
Liabilities extinguished on settlements ................................................................................................... (4) (38)
Exchange differences ............................................................................................................................... 55 (142)
At 31 December ....................................................................................................................................... 937 839
Changes in the fair value of plan assets
2009 2008
US$m US$m
At 1 January ............................................................................................................................................. 128 146
Expected return on plan assets ................................................................................................................ 11 12
Contributions by HSBC ........................................................................................................................... 11 19
Experience gains/(losses) ........................................................................................................................ 8 (14)
Benefits paid ............................................................................................................................................ (4) (9)
Assets distributed on settlements ............................................................................................................ (4) (12)
Exchange differences ............................................................................................................................... (8) (14)
At 31 December ....................................................................................................................................... 142 128
The actual return on plan assets for the year ended 31 December 2009 was a positive return of US$19 million (2008:
negative US$2 million).