Peachtree 2013 Annual Report Download - page 119

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Operating assets and liabilities continued
The Sage Group plc | Annual Report & Accounts 2013 113
Financial statements
8 Post-employment benefits
The r h esthe r o pesio schemes around the world covering many of its employees. All of these schemes are defined contribution
schemes with the exception of a small defined benefit pension scheme in Switzerland and another post-employment defined benefit scheme in France.
Under French legislation, the Group is required to make one-off payments to employees in France who reach retirement age while still in employment.
Pension costs Note
2013
£m
2012
£m
Defined contribution schemes 9.2 10.0
Defined benefit plans 2.2 1.9
2.3 11.4 11.9
Defined benefit plans
The most recent actuarial valuations of the post-employment benefit plans were performed by Ernst & Young in October 2013.
Weighted average principal assumptions made by the actuaries
2013
%
2012
%
Rate of increase in pensionable salaries 2.90 2.90
Rate of increase in pensions in payment and deferred pensions 0.00 0.00
Discount rate 2.55 2.80
Inflation assumption 1.55 1.50
Expected return on plan assets 2.50 2.10
Mortality rate assumptions made by the actuaries
2013
years
2012
years
A
verage life expectancy for 65-year-old male 20.8 20.0
A
verage life expectancy for 65-year-old female 25.0 24.7
A
verage life expectancy for 45-year-old male 32.9 32.5
A
verage life expectancy for 45-year-old female 39.2 39.0
A
mounts recognised in the balance sheet
2013
£m
2012
£m
Present value of funded obligations (30.3) (30.8)
Fair value of plan assets 17.4 16.5
Net liability recognised in the balance sheet (12.9) (14.3)
The expected return on plan assets is based on market expectation at the beginning of the period for returns over the entire life of the
benefit obligation.
Major categories of plan assets as a percentage of total plan assets £m
2013
% £m
2012
%
Bonds 9.2 52.9 9.3 56.4
Equities 4.8 27.6 2.3 13.9
Property – – 1.1 6.7
Other 3.4 19.5 3.8 23.0
17.4 100.0 16.5 100.0
The expected return on plan assets is determined by considering the expected returns available on the assets underlying the current investment policy.
Expected yields on fixed interest investments are based on gross redemption yields at the end of the reporting period. Expected returns on equity and
property investments reflect long-term real rates of return experienced in the respective markets.
Expected contributions to post-employment benefit plans for the year ending 30 September 2014 are £1.6m (2012: expected contributions year
ending 30 September 2013 £0.6m).
A
mounts recognised in the income statement
2013
£m
2012
£m
Interest cost (0.8) (0.9)
Expected return on plan assets 0.4 0.4
Current service cost (1.8) (1.4)
Total included within staff costs (2.2) (1.9)
The entire cost is included within selling and administrative expenses.
117The Sage Group plc | Annual Report & Accounts 2013
GovernanceStrategic report Financial statements