BP 2014 Annual Report Download - page 143

22. Pensions and other post-retirement benefits – continued
$ million
2014
UK US Eurozone Other Total
Analysis of the amount charged to profit before interest and taxation
Current service costa494 356 72 87 1,009
Past service costb– (33) 20 1 (12)
Settlementc– (66) – – (66)
Operating charge relating to defined benefit plans 494 257 92 88 931
Payments to defined contribution plans 30 214 11 54 309
Total operating charge 524 471 103 142 1,240
Interest income on plan assetsa(1,425) (317) (70) (80) (1,892)
Interest on plan liabilities 1,378 458 255 115 2,206
Other finance expense (47) 141 185 35 314
Analysis of the amount recognized in other comprehensive income
Actual asset return less interest income on plan assets 1,269 768 119 31 2,187
Change in financial assumptions underlying the present value of the plan liabilities (3,188) (1,004) (1,845) (350) (6,387)
Change in demographic assumptions underlying the present value of the plan liabilities 42 (264) (20) (9) (251)
Experience gains and losses arising on the plan liabilities (41) 13 (86) (25) (139)
Remeasurements recognized in other comprehensive income (1,918) (487) (1,832) (353) (4,590)
Movements in benefit obligation during the year
Benefit obligation at 1 January 30,552 11,002 7,536 2,443 51,533
Exchange adjustments (1,993) – (1,040) (256) (3,289)
Operating charge relating to defined benefit plans 494 257 92 88 931
Interest cost 1,378 458 255 115 2,206
Contributions by plan participantsd39 – 4 7 50
Benefit payments (funded plans)e(1,231) (865) (83) (119) (2,298)
Benefit payments (unfunded plans)e(10) (238) (370) (24) (642)
Acquisitions –6––6
Disposals – – (18) – (18)
Remeasurements 3,187 1,255 1,951 384 6,777
Benefit obligation at 31 Decemberaf 32,416 11,875 8,327 2,638 55,256
Movements in fair value of plan assets during the year
Fair value of plan assets at 1 January 31,516 7,778 2,015 1,822 43,131
Exchange adjustments (1,958) – (257) (161) (2,376)
Interest income on plan assetsag 1,425 317 70 80 1,892
Contributions by plan participantsd39 – 4 7 50
Contributions by employers (funded plans) 713 354 110 75 1,252
Benefit payments (funded plans)e(1,231) (865) (83) (119) (2,298)
Acquisitions –3––3
Disposals – – (5) – (5)
Remeasurementsg1,269 768 119 31 2,187
Fair value of plan assets at 31 December 31,773 8,355 1,973 1,735 43,836
Surplus (deficit) at 31 December (643) (3,520) (6,354) (903) (11,420)
Represented by
Asset recognized 15 – 3 13 31
Liability recognized (658) (3,520) (6,357) (916) (11,451)
(643) (3,520) (6,354) (903) (11,420)
The surplus (deficit) may be analysed between funded and unfunded plans as follows
Funded (310) (19) (663) (384) (1,376)
Unfunded (333) (3,501) (5,691) (519) (10,044)
(643) (3,520) (6,354) (903) (11,420)
The defined benefit obligation may be analysed between funded and unfunded
plans as follows
Funded (32,083) (8,374) (2,636) (2,119) (45,212)
Unfunded (333) (3,501) (5,691) (519) (10,044)
(32,416) (11,875) (8,327) (2,638) (55,256)
aThe costs of managing plan investments are offset against the investment return, the costs of administering pension plan benefits are generally included in current service cost and the costs of
administering other post-retirement benefit plans are included in the benefit obligation.
bPast service costs in the US include a credit of $21 million as the result of a curtailment in the pension arrangement of a number of employees following a business reorganization and a credit of
$12 million reflecting a plan amendment to a medical plan. A charge of $21 million for special termination benefits represents the increased liability arising as a result of early retirements occurring as
part of restructuring programmes mostly in the Eurozone.
cSettlements represent a gain of $66 million arising from an offer to a group of plan members in the US to settle annuity liabilities with lump sum payments.
dMost of the contributions made by plan participants into UK pension plans were made under salary sacrifice.
eThe benefit payments amount shown above comprises $2,621 million benefits and $257 million settlements, plus $62 million of plan expenses incurred in the administration of the benefit.
fThe benefit obligation for the US is made up of $9,033 million for pension liabilities and $2,842 million for other post-retirement benefit liabilities (which are unfunded and are primarily retiree medical
liabilities). The benefit obligation for the Eurozone includes $5,220 million for pension liabilities in Germany which is largely unfunded.
gThe actual return on plan assets is made up of the sum of the interest income on plan assets and the remeasurement of plan assets as disclosed above.
Financial statements
BP Annual Report and Form 20-F 2014 139