Description Page - Doosan Power Systems

DOOSAN BABCOCK ENERGY
Annual Report and Financial Statements 2007
Notes to the financial statements continued
4. Employees and directors (continued)
The major assumptions used by the actuary were: December March March
2007 2007 2006
£000 £000 £000
Financial assumptions:
Discount rate 5.4% 5.1% 5.0%
Rate of increase in pensionable salaries 2.5% - 4.0% 2.5% -3.5% 2.5% - 3.5%
Rate of increase in pensions in payment (post May 2002 service) 3.0% 2.75% 2.5%
Rate of increase in pensions in payment (pre May 2002 service) 3.0% 3.0% 3.0%
Inflation assumption (and increases to pension in deferment) 3.0% 2.75% 2.5%
Demographic assumptions:
Pre retirement mortality (male/ female) PMA92 YOB + 1 / A67/70-1 / A67/70-1 /
PFA92 YOB + 1 FA75/78 – 1 FA75/78 – 1
Post retirement mortality for non pensioner members (male/ female) PMA92 YOB + 1 / PA90 – 5 PA90 – 5
PFA92 YOB + 1
Post retirement mortality for pensioner members (male/ female) PMA92 YOB + 1 / PA90 – 5 PA90 – 5
PFA92 YOB + 1
The rates used have been chosen from a range of possible amounts determined using actuarial assumptions that due to the timescale covered may
not necessarily be borne out in practice.
The assets in the scheme and the expected rates of return were:
32
December March March
2007 2007 2006
Expected Expected Expected
rate rate rate
of return of return of return
% £m % £m % £m
Equities and property 8.5 – 8.0 – 8.0 123.5
Diversified growth fund 8.5 165.6 8.0 150.8 – –
Bonds 5.4 50.9 5.0 49.4 4.5 47.4
Cash 4.75 1.8 4.75 1.2 4.0 2.6
Total market value of assets 218.3 201.4 173.5
Present value of liabilities (233.6) (227.5) (215.6)
Deficit in scheme (15.3) (26.1) (42.1)
Related deferred tax asset 4.3 7.8 12.6
Net pension liability (11.0) (18.3) (29.5)
An analysis of the movement in the deficit during the period to 31 December 2007 follows:
9 months 12 months
ended ended
December March
2007 2007
Notes £m £m
Deficit in scheme at beginning of the period (26.1) (42.1)
Movement in the period:
Current employee service cost (4.7) (6.5)
Employer contributions 10.1 22.1
Other financing credit 5 2.5 2.0
Actuarial gain/(loss) 2.9 (1.6)
Deficit in scheme at end of the period (15.3) (26.1)