Annual Report & Accounts 2009 - Anglo Irish Bank

11. Retirement benefits
The parent Bank operates two defined benefit non-contributory pension schemes in Ireland. The assets of these schemes are
held in separate trustee-administered funds. These schemes have been closed to new members since January 1994. New Irish
employees after that date join a funded scheme on a defined contribution basis. There are also funded defined contribution
pension plans covering eligible Group employees in other locations as well as unfunded defined benefit pension plans relating
to certain Austrian employees. In the case of a number of Austrian employees whose employment contracts commenced prior
to 1 January 2003, Austrian law requires employers to pay lump sums upon retirement or termination of employment if the
employee has been with a company for at least three years. The amount payable is calculated based on length of service and
salary. The Group's liability in respect of the Austrian unfunded defined benefit pension plans was transferred on the sale of
Anglo Irish Bank (Austria) A.G. on 19 December 2008.
Neither the Group nor the Bank operates a post-employment medical benefit scheme.
Details of defined benefit schemes
Retirement benefits under the Bank’s Irish defined benefit plans are calculated by reference to pensionable service and
pensionable salary at normal retirement date. The pension charge in the income statement relating to the two defined benefit
pension schemes is based on the advice of an independent actuary. An actuarial valuation for the purposes of IAS 19 has been
prepared as at 31 December 2009 by an independent actuary using the projected unit method. Using this method the current
service cost will increase as the members of closed schemes approach retirement.
The principal assumptions used, which are based on the advice of an independent actuary, are set out in the table below:
Financial assumptions 31 December 30 September
2009 2008
% p.a. % p.a.
Discount rate for liabilities of the schemes 6.00
Rate of increase in salaries 3.00
Rate of increase in pensions 2.00 to 3.00 2.50 to 3.00
Inflation rate 2.00
Mortality assumptions
The key mortality assumptions used in estimating the actuarial value of the schemes' liabilities are:
Longevity at age 60 for current pensioners (years)
Males 26.2
Females 29.3
Longevity at age 60 for future pensioners (years)
Males 27.4
Females 30.5
6.00
4.00
2.50
31 December 30 September
2009 2008
Sensitivity analysis
Sensitivity analysis for each of the principal assumptions used to measure the schemes' liabilities at 31 December 2009 is as
follows:
Impact on scheme liabilities
Anglo Irish Bank
Annual Report & Accounts 2009
25.3
28.4
26.5
29.6
Change in increase by increase by
assumption % €m
Discount rate Decrease 0.5%
9.8% 9
Rate of increase in salaries Increase 0.5%
1.5% 1
Inflation rate Increase 0.5%
3.7% 3
Life expectancy Increase by 1 year
2.2% 2
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