Marks and Spencer 2008 Annual Report Download - page 73

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11 Retirement benefits continued
D Analysis of assets and expected rates of return
The major categories of assets and as a percentage of total plan assets are:
2008 2007 2008 2007
£m £m %%
Property partnership interest 506.6 495.3 10 9
UK equities 792.1 826.0 16 16
Overseas equities 1,116.6 1,385.3 22 27
Government bonds 465.4 363.0 97
Corporate bonds 2,058.5 2,153.0 41 41
Cash and other 106.3 4.9 2–
5,045.5 5,227.5 100 100
The expected long-term rates of return are:
2008 2007
%%
Property partnership interest 6.0 5.5
UK equities 8.3 8.4
Overseas equities 8.3 8.4
Government bonds 4.6 4.7
Corporate bonds 6.0 5.3
Cash and other 5.0 5.5
Overall expected return 6.7 6.6
The overall expected return on assets assumption is derived as the weighted average of the expected returns from each of
the main asset classes. The expected return for each asset class reflects a combination of historical performance analysis,
the forward-looking views of financial markets (as suggested by the yields available) and the views of investment organisations.
Consideration is also given to the rate of return expected to be available for reinvestment.
At year end, the UK scheme indirectly held 479,356 (last year 463,964) ordinary shares in the Company through its investment
in an Aquila Life UK Equity Index Fund.
E Analysis of amount charged against profits
2008 2007
£m £m
Operating cost
Current service cost1106.1 113.9
Curtailment gain (3.0) (2.0)
Exceptional pension credit (95.0) –
8.1 111.9
Finance cost
Expected return on plan assets (342.7) (282.0)
Interest on scheme liabilities 283.8 261.2
Net finance income (58.9) (20.8)
Total (50.8) 91.1
1 Includes £11.7m (last year £8.6m) in relation to defined contribution plans.
marksandspencer.com/annualreport08 MARKS AND SPENCER GROUP PLC 71
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