HSBC 2002 Annual Report Download - page 210

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
208
Year ended 31 December 2002
H
SBC Ban
k
(UK)
P
ension Othe
r
Scheme Schemes
US$m US$m
Amount that would be recognised in the statement of total consolidated
recognised gains and losses
Actual return less expected return on pension scheme assets ...................... (1,825) (510)
Experience gains and losses arising on the scheme liabilities...................... (18) 95
Changes in assumptions underlying the present value of the scheme
liabilities 402 59
Actuarial loss ............................................................................................... (1,441) (356)
Movement in pension scheme deficit during the year
Deficit in the pension schemes at 1 January 2002 ....................................... (1,091) (654)
Movement in year:
Current service cost ................................................................................... (280) (184)
Contributions ............................................................................................. 191 445
Other finance income................................................................................. 28 2
Actuarial loss ............................................................................................. (1,441) (356)
Exchange and other movements ................................................................ (233) 28
Deficit in the pension schemes at 31 December 2002 (2,826) (719)
History of experience gains and losses
Difference between expected and actual return on scheme assets:
amount ....................................................................................................... (1,825) (510)
percentage of scheme assets....................................................................... (20%) (15% )
Experience gains and losses arising on scheme liabilities:
amount ....................................................................................................... (18) 95
percentage of the present value of scheme liabilities ................................. (0.1% ) 2%
Total amount recognised in the statement of total consolidated gains and
losses:
amounts...................................................................................................... (1,441) (356)
percentage of the present value of scheme liabilities ................................. (12%) (9%)
Most of the employees of HSBC Holdings are members of the HSBC Bank (UK) Pension Scheme. HSBC
Holdings is unable to identify its share of the underlying assets and liabilities of this scheme attributable to its
employees.
(iii) Post-retirement healthcare benefits
HSBC also provides post-retirement healthcare benefits under schemes, mainly in the United Kingdom and also
in the United States, Canada, Mexico and Brazil. The charge relating to these schemes is US$54 million for the
year (2001: US$39 million; 2000:US$42 million). The schemes are unfunded, except for the scheme in Mexico
which had assets of US$13 million at 31 December 2002 comprising US$2 million in equities, US$6 million in
bonds and US$5 million in cash. The latest full actuarial valuations of the liability were carried out at dates
between 31 December 1999 and 31 December 2002 by independent qualified actuaries and have been updated
to 31 December 2002 as necessary. This latest actuarial review (in accordance with FRS 17) estimated the
present value of the accumulated post-retirement benefit obligation at US$491 million (2001: US$404 million;
2000: US$411 million), of which US$366 million (2001: US$269 million; 2000: US$253 million) has been
provided and US$13million is held in assets in the funded scheme in Mexico. The actuarial assumptions used to
estimate this obligation vary according to the claims experience and economic conditions of the countries in
which the schemes are situated. For the UK schemes, the main financial assumptions used at 31 December