Tesco plc Annual Report and Financial Statements 2008

Notes to the Group financial statements continued
Note 24 Post-employment benefits continued
Summary of movements in deficit during the year
2008 2007 2006
£m £m £m
Deficit in schemes at beginning of the year (950) (1,211) (735)
Current service cost (461) (466) (328)
Past service gains – 258 –
Other finance income 47 34 25
Contributions by employer 340 321 270
Foreign currency translation differences 1 2 (1)
Actuarial gain/(loss) 186 112 (442)
Acquisitions (1) – –
Deficit in schemes at end of the year (838) (950) (1,211)
History of movements
The historical movement in defined benefit pension schemes assets and liabilities and history of experience gains and losses are as follows:
2008 2007 2006 2005
£m £m £m £m
Total market value of assets 4,089 4,007 3,448 2,718
Present value of liabilities relating to unfunded schemes (34) (27) (17) (12)
Present value of liabilities relating to partially funded schemes (4,893) (4,930) (4,642) (3,441)
Pension deficit (838) (950) (1,211) (735)
Experience (losses)/gains on scheme assets (465) 82 309 66
Experience losses on plan liabilities (20) (41) (24) (14)
Post-employment benefits other than pensions
The Company operates a scheme offering retirement healthcare benefits. The cost of providing these benefits has been accounted for on a similar basis
to that used for defined benefit pension schemes.
The liability as at 23 February 2008 of £11m (2007 – £11m) was determined in accordance with the advice of independent actuaries. In 2007/8,
£0.6m (2007 – £0.5m) has been charged to the Group Income Statement and £0.7m (2007 – £0.6m) of benefits were paid.
A change of 1.0% in assumed healthcare cost trend rates would have the following effect:
2008 2007 2006
£m £m £m
Effect of a 1% increase in assumed healthcare cost trend rate on:
Service and interest cost 0.1 0.1 0.1
Defined benefit obligation 1.6 1.3 1.0
Effect of a 1% decrease in assumed healthcare cost trend rate on:
Service and interest cost (0.1) (0.1) (0.1)
Defined benefit obligation (1.3) (1.3) (1.1)
Expected contributions
A formal actuarial valuation is carried out triennially for the independent scheme trustees by a professionally qualified independent actuary. The purpose
of the valuation is to agree a funding plan to ensure that present and future contributions should be sufficient to meet future liabilities. The actuarial
valuation of approved schemes as at 31 March 2008 is currently taking place and until the valuation is concluded, contributions will continue as agreed
at the 2005 funding plan. On this basis the Group expects to make contributions of approximately £370m to defined benefit pension schemes in the year
ending 28 February 2009.
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Tesco PLC Annual Report and
Financial Statements 2008
www.tesco.com/annualreport08