GSK Annual Report 2002

138 GlaxoSmithKline Notes to the financial statements
37 Reconciliation to US accounting principles continued
Post-retirement healthcare under US GAAP
The disclosures for 2002 and 2001 are provided in relation to the employees of GlaxoSmithKline. For 2000 the income statement
disclosures are provided in relation to the employees of Glaxo Wellcome only.
2002 2001 2000
Net healthcare cost £m £m £m
Service cost 23 15 5
Interest cost 53 40 13
Amortisation of prior service cost 2 (3) (2)
Net healthcare cost 78 52 16
The major assumptions used in calculating the net healthcare cost were: %pa %pa %pa
Rate of future healthcare inflation 7.0 to 5.0 7.0 to 5.0 7.8 to 4.9
Discount rate 6.75 7.3 7.2
The rate of future healthcare inflation reflects the fact that the benefits of certain groups of participants are capped.
2002 2001
Change in benefit obligation £m £m
Benefit obligation at beginning of year 788 583
Adjustment for change in accounting principle 13 –
Amendments – (1)
Service cost 77 15
Interest cost 53 40
Plan participants’ contributions 9 2
Actuarial loss 24 202
Benefits paid (50) (31)
Acquisition – (32)
Curtailments – (2)
Exchange (84) 12
Benefit obligation at end of year 830 788
Change in plan assets
Fair value of plan assets at beginning of year – –
Employer and plan participants’ contributions 51 31
Benefits paid (51) (31)
Fair value of plan assets at end of year – –
Funded status
Funded status (830) (788)
Unrecognised net actuarial loss 230 216
Unrecognised prior service cost (17) (20)
Other – 8
Accrued post-retirement healthcare cost (617) (584)
The impact of a 1 per cent variation in the rate of future healthcare inflation would be:
1% decrease
£m
1% increase
£m
Effect on total service and interest cost (9) 8
Effect on provision for post-retirement benefits (85) 71