HSBC 2012 Annual Report Download - page 416

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
7 – Employee compensation and benefits
414
Cumulative actuarial gains/(losses) recognised in other comprehensive income
2012 2011 2010
US$m US$m US$m
At 1 January ...................................................................................................................
.
(3,453) (4,720) (4,660)
HSBC Bank (UK) Pension Scheme ..............................................................................
.
208 1,945 321
Other plans .....................................................................................................................
.
(440) (642) (275)
Healthcare plans ............................................................................................................
.
(154) (61) (112)
Change in the effect of limit on plan surpluses1 ............................................................
.
(5) 25 6
Total actuarial gains/(losses) recognised in other comprehensive income ...................
.
(391) 1,267 (60)
At 31 December2 ............................................................................................................
.
(3,844) (3,453) (4,720)
1 Excludes exchange loss of US$4m (2011: US$4m loss; 2010: US$6m gain)
2 Includes cumulative movements related to the limit on plan surpluses. This limit was US$19m at 31 December 2012 (2011: US$18m;
2010: US$47m)
HSBC pension plans
2012 2011 2010
Number of plans worldwide ........................................................................................ 225 230 218
% % %
Percentage of HSBC employees:
– enrolled in defined contribution plans ................................................................ 62 64 63
– enrolled in defined benefit plans ......................................................................... 23 25 27
– covered by HSBC pension plans ......................................................................... 85 89 90
HSBC has been progressively offering all new employees membership of defined contribution plans.
The majority of the Group’s defined benefit plans are funded plans. The assets of most of the larger plans are held
in trusts or similar funds separate from HSBC. The plans are reviewed at least annually or in accordance with local
practice and regulations by qualified actuaries. The actuarial assumptions used to calculate the defined benefit
obligations and related current service costs vary according to the economic conditions of the countries in which
the plans are situated.
At 31 December 2012, the present values of the defined benefit obligations of The HSBC Bank (UK) Pension
Scheme was US$26,475m (2011: US$24,367m), The HSBC Group Hong Kong Local Staff Retirement Benefit
Scheme was US$1,476m (2011:US$1,523m) and the HSBC North America (US) Retirement Income Plan was
US$4,374m (2011: US$3,895m). These defined benefit pension plans covered 12% of HSBC’s employees and
represented 82% of the Group’s present value of defined benefit obligations. The Pension Risk section on page 246
and the Appendix to Risk on page 252 contain details about the characteristics and risks and amount, timing and
uncertainty of future cash flows and policies and practices associated with these three schemes.
The determinations described in the Pension Risk section on page 246 for actuarial funding valuation purposes are
based on different methods and assumptions from those used for financial reporting purposes, and as a result should
neither be compared nor related to other determinations included in these financial statements. There is no actuarial
deficit in the Principal plan.
HSBC healthcare benefits plans
HSBC also provides post-employment healthcare benefits under plans in the UK, the US, Bermuda, Canada, Mexico
and Brazil, the majority of which are unfunded. The majority of post-employment healthcare benefits plans are
defined benefit plans and are accounted for in the same manner as defined benefit pension plans. The plans are
reviewed at least annually or in accordance with local practice and regulations by qualified actuaries. The actuarial
assumptions used to calculate the defined benefit obligation and related current service cost vary according to the
economic conditions of the countries in which they are situated.
At 31 December 2012, the present value of the defined benefit obligation of HSBC’s healthcare benefit plans was
US$1,261m (2011: US$1,091m). In aggregate, healthcare benefit plans comprised 3% of HSBC’s present value of
defined benefit obligations.