Notes to the Interim report (unaudited)
8 Post-retirement benefits
Smiths operates a number of defined benefit plans throughout the world. The principal schemes are in the United Kingdom and in the United States and are of the defined benefit type, with assets held in separate trustee-administered funds. The principal changes to the assumptions used in updating the valuations for defined benefit pension plans are as follows:
|
31 January 2009 |
2 February 2008 |
31 July 2008 |
|||
|
UK |
US |
UK |
US |
UK |
US |
Rate of increase in salaries |
3.8% |
3.8% |
4.3% |
3.8% |
4.1% |
3.8% |
Rate of increase in pensions in payment |
3.3% |
n/a |
3.3% |
n/a |
3.6% |
n/a |
Rate of increase in deferred pensions |
3.3% |
n/a |
3.3% |
n/a |
3.5% |
n/a |
Discount rate |
6.6% |
6.4% |
6.2% |
6.3% |
6.6% |
6.8% |
Inflation rate |
3.3% |
3.3% |
3.3% |
2.8% |
3.6% |
3.3% |
An operating charge of £11.7m and an interest credit of £2.4m have been recognised in the six month period to 31 January 2009 in respect of defined benefit pension and post-retirement healthcare plans.
Changes in the market value of post-retirement benefit scheme assets were largely due to a decline in global stock market values.
The amounts recognised in the balance sheet were as follows:
|
31 January |
2 February |
31 July |
|
|
|
|
Market value of funded plan assets |
2,637.1 |
3,245.7 |
2,959.9 |
Present value of funded scheme liabilities |
(2,966.0) |
(3,000.9) |
(2,856.5) |
Unfunded pension plans |
(59.0) |
(55.8) |
(54.4) |
Post-retirement healthcare |
(74.8) |
(64.9) |
(58.0) |
Unrecognised asset due to surplus restriction |
(1.5) |
(2.4) |
(1.5) |
Net retirement benefit asset |
(464.2) |
121.7 |
(10.5) |
Retirement benefit assets |
55.6 |
306.6 |
174.2 |
Retirement benefit liabilities |
(519.8) |
(184.9) |
(184.7) |
Net retirement benefit asset |
(464.2) |
121.7 |
(10.5) |