Ardagh Glass Finance plc - Irish Stock Exchange

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. Retirement benefit obligations (Continued)
2007 2006
E’000 E’000
Actuarial gains recognised in the SORIE .................................. 3,877 16,781
The cumulative actuarial gains recognised in the SORIE ...................... 8,835 4,958
The principal pension assumptions used were as follows:
2007
Netherlands Ireland UK Germany Poland
% % % % %
Rate of increase in salaries ...................... 2.50 4.00 3.70 2.50 2.50
Rate of increase in pensions ...................... 2.00 0.00 3.20 1.50 2.50
Discount rate ................................ 5.40 4.25 5.70 5.50 6.00
Expected return on plan assets .................... 6.25 4.50 7.75 n/a 2.50
2006
Ireland UK Germany Poland
% % % %
Rate of increase in salaries ................................ 4.00 3.40 1.80 1.25
Rate of increase in pensions ............................... 0.00 2.90 1.50 1.25
Discount rate ......................................... 4.00 5.30 4.50 4.98
Expected return on plan assets ............................. 3.75 7.75 n/a n/a
As at 31 December 2007 2006 2005 2004
E E E E
Present value of defined benefit obligations ............ (284,660) (176,048) (249,590) (193,111)
Fair value of plan assets .......................... 237,862 148,123 189,528 148,163
Deficit ....................................... (46,798) (27,925) (60,062) (44,948)
The terms of one of the Pension Schemes in the UK were changed, by agreement with the
Trustees and members, to a shared cost scheme with effect from 1 January 2006. The scheme is funded
on a shared cost basis whereby the employees fund one third of the cost of providing the benefits and
Rockware funds two thirds of the cost. As a result of this change Rockware has no obligation to fund
the employee share of any pension deficit. On 1 January 2006 one third of the Rockware pension
deficit was derecognised. This has been treated as a settlement gain on the pension and as a result a
credit of A19,269,000 has been recognised on the ‘Other Income and Expense’ line in the Income
Statement. One third of the related deferred tax asset A5,887,000 was also derecognised on 1 January
2006. The net credit to the Income Statement amounted to A13,382,000.
The Group has made assumptions relating to mortality, the age at which members retire or leave
the Scheme, the proportion of members who are married, etc. The Scheme does not have sufficient
members to determine most of these assumptions reliably based on its own experience; therefore the
Group has used statistics based on larger populations or from published national and regional tables
and the advice of its actuaries in determining the most appropriate assumptions to use. While
allowance has been made for continuing improvements in life expectancy allowance has also been made
to reflect the location of the plants, the nature of the members’ occupations and the experience of
mortality in the regions where the employees/former employees are located compared to the average
life expectancy for the jurisdiction in which the plants are located.
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