BP Annual Report and Form 20-F 2011 - Company Reporting

Notes on financial statements37. Pensions and other post-retirement benefits continuedUKpensionplansUSpensionplansUS other postretirementbenefitplansTotalAnalysis of the amount charged to profit before interest and taxationCurrent service cost a 393 241 48 120 802Past service cost – – – 3 3Settlement, curtailment and special termination benefits 24 – – 161 185Payments to defined contribution plans 1 187 – 35 223Total operating charge b 418 428 48 319 1,213Analysis of the amount credited (charged) to other finance expenseExpected return on plan assets 1,580 465 1 178 2,224Interest on plan liabilities (1,183) (396) (169) (429) (2,177)Other finance income (expense) 397 69 (168) (251) 47Analysis of the amount recognized in other comprehensive incomeActual return less expected return on pension plan assets 1,577 425 (1) 36 2,037Change in assumptions underlying the present value of the plan liabilities (1,144) (498) (132) (489) (2,263)Experience gains and losses arising on the plan liabilities 12 (167) (8) 69 (94)Actuarial (loss) gain recognized in other comprehensive income 445 (240) (141) (384) (320)Movements in benefit obligation during the yearBenefit obligation at 1 January 21,425 7,519 2,996 8,133 40,073Exchange adjustments (835) – – (269) (1,104)Current service cost a 393 241 48 120 802Past service cost – – – 3 3Interest cost 1,183 396 169 429 2,177Curtailment – – – 4 4Settlement 11 – – 18 29Special termination benefits c 13 – – 139 152Contributions by plan participants d 39 – – 13 52Benefit payments (funded plans) e (952) (758) (4) (192) (1,906)Benefit payments (unfunded plans) e (3) (75) (192) (387) (657)Acquisitions – – – 2 2Disposals (43) – – (29) (72)Actuarial (gain) loss on obligation 1,132 665 140 420 2,357Benefit obligation at 31 December a f 22,363 7,988 3,157 8,404 41,912Movements in fair value of plan assets during the yearFair value of plan assets at 1 January 22,549 5,823 12 3,069 31,453Exchange adjustments (881) – – 29 (852)Expected return on plan assets a g 1,580 465 1 178 2,224Contributions by plan participants d 39 – – 13 52Contributions by employers (funded plans) 411 694 – 187 1,292Benefit payments (funded plans) e (952) (758) (4) (192) (1,906)Acquisitions – – – 2 2Disposals (43) – – (28) (71)Actuarial gain (loss) on plan assets g 1,577 425 (1) 36 2,037Fair value of plan assets at 31 December 24,280 6,649 8 3,294 34,231Surplus (deficit) at 31 December 1,917 (1,339) (3,149) (5,110) (7,681)Represented byAsset recognized 2,120 – – 56 2,176Liability recognized (203) (1,339) (3,149) (5,166) (9,857)1,917 (1,339) (3,149) (5,110) (7,681)The surplus (deficit) may be analysed between funded and unfunded plans as followsFunded 2,115 (838) (39) (223) 1,015Unfunded (198) (501) (3,110) (4,887) (8,696)1,917 (1,339) (3,149) (5,110) (7,681)The defined benefit obligation may be analysed between funded and unfundedplans as followsFunded (22,165) (7,487) (47) (3,517) (33,216)Unfunded (198) (501) (3,110) (4,887) (8,696)(22,363) (7,988) (3,157) (8,404) (41,912)aThe costs of managing the plan’s investments are treated as being part of the investment return, the costs of administering our pension plan benefits are generally included in current service cost and thecosts of administering our other post-retirement benefit plans are included in the benefit obligation.bIncluded within production and manufacturing expenses and distribution and administration expenses.cThe charge for special termination benefits represents the increased liability arising as a result of early retirements occurring as part of restructuring programmes.dMost of the contributions made by plan participants after 1 January 2010 into UK pension plans were made under salary sacrifice arrangements.eThe benefit payments amount shown above comprises $2,507 million benefits plus $56 million of plan expenses incurred in the administration of the benefit.fThe benefit obligation for other plans includes $3,871 million for the German plan, which is largely unfunded.gThe actual return on plan assets is made up of the sum of the expected return on plan assets and the actuarial gain on plan assets as disclosed above.Otherplans$ million2010Financial statementsBP Annual Report and Form 20-F 2011 239