Brambles 2006 Annual Report - Alle jaarverslagen

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Brambles
2006 Annual Report
h) Principal actuarial assumptions
Principal actuarial assumptions (expressed as weighted averages) used in determing Brambles’ defined benefit obligations were:
UK
%
Europe
other
than UK
%
Australia
%
South
Africa
%
At 30 June 2006
Rate of increase in salaries 4.4 3.8 4.5 5.0
Rate of increase in pensions 3.1 3.0 – 6.0
Discount rate 5.2 5.4 4.9 8.5
Retail price inflation 3.1 2.1 3.0 6.0
Return on equities 8.0 7.8 8.5 12.0
Return on bonds 5.1 4.3 5.0 8.1
Return on cash 4.5 2.5 5.0 6.8
At 30 June 2005
Rate of increase in salaries 4.0 3.5 4.0 5.0
Rate of increase in pensions 2.9 2.5 – 5.0
Discount rate 5.1 4.2 5.1 8.0
Retail price inflation 2.8 2.1 2.5 5.0
Return on equities 6.0 7.3 7.5 9.7
Return on bonds 4.0 3.2 4.8 8.0
Return on cash 4.8 2.0 4.3 7.0
Assumptions about mortality are made using government actuarial tables, for example tables PXA92M and PXA92F for males and females
in the UK. Using these tables, the life expectancy of a UK pensioner aged 65 today would be 84 years for men and 87 years for women.
The expected return on plan assets is based on market expectations at the beginning of the period for returns over the entire life of the
benefit obligation.
i) Employer contributions
During the year employer contributions to the main defined benefit plans ranged between 10% and 22% of pensionable pay.
The obligation to contribute to the various defined benefit plans is covered by trust deeds and/or legislation. Funding levels and
contributions for these plans are based on regular actuarial advice. Comprehensive actuarial valuations are made at no more than three
yearly intervals.
An objective of the valuations is to be fully funded on an ongoing funding basis. To achieve this objective, the actuaries have used the
Projected Unit funding method for all pension schemes, except the Brambles United Kingdom Pension Plan which uses the Attained Age
method. The Projected Unit method derives a capital value for past service liabilities by discounting assumed benefit payments back to
the valuation date. The capital value of benefits due to be earned in the year after the valuation date are divided by the total pensionable
payroll to give a future service contribution rate.
The calculations have spread any surplus or deficits arising over a suitable period and deducted from or added to the future service
contribution rate. Assets have been taken at their market value.
Funding recommendations made by the actuaries are based on various economic and demographic assumptions. The main economic
assumptions applied are price inflation of 2.9%, salary inflation between 1.3% and 4.2%, pre-retirement investment returns of 7.8%
and post-retirement investment returns of 5.1%.
Using the above-mentioned actuarial assumptions as to the pension plans’ future experience, additional annual contributions of
US$8.6 million are being paid to remove the identified deficits over a period 7.5 years.
Contributions paid to the plans during 2006 were US$23.2 million (2005: US$28.7 million) of which US$14.9 million (2005:
US$20.9 million) related to discontinued operations. It is estimated that the amount of contributions to be paid to the plans
during 2007 will be US$10.0 million for continuing operations.
j) Historical summary
The history of experience adjustments is as follows:
2006
US$m
2005
US$m
– On plan liabilities 4.3 47.4
– On plan assets 31.1 38.2
Information for years prior to 2005 is not available.