HSBC 2004 Annual Report Download - page 258

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
256
Year ended 31 December
2004 2003
HSBC
Bank (UK)
Pension
Scheme
Other
schemes
HSBC
Bank (UK)
Pension
Scheme
Other
schemes
US$m US$m US$m US$m
Movement in deficit in the pension schemes
during the year
Deficit in the pension schemes at 1 January ...... (3,372) (252) (2,826) (719)
Movement in the year:
Total operating charge ....................................... (377) (260) (277) (243)
Contributions ..................................................... 289 224 1,189 548
Other finance income ........................................ 26 57 53 27
Actuarial (loss)/gain .......................................... (627) (262) (1,186) 277
Acquisition of subsidiary undertaking ............... – (12) – (106)
Exchange and other movements ........................ (318) (55) (325) (36)
Deficit in the pension schemes at 31 December (4,379) (560) (3,372) (252)
1Includes US$193 million increase in pension liability relating to termination benefits attributable to members of the HSBC
Bank (UK) Pension Scheme. If FRS 17 were implemented this amount would be recognised in the profit and loss account,
but not as part of pension costs. A further amount of US$63 million attributable to members scheduled to cease employment
in 2005 is not included in the liability for this scheme as at 31 December 2004.
Year ended 31 December
2004 2003 2002
HSBC
Bank (UK)
Pension
Scheme
Other
schemes
HSBC
Bank (UK)
Pension
Scheme
Other
schemes
HSBC
Bank (UK)
Pension
Scheme
Other
schemes
US$m US$m US$m US$m US$m US$m
History of experience gains and
losses
Difference between expected and
actual return on scheme assets:
– amount ....................................... 498 68 987 442 (1,825) (510)
– percentage of scheme assets ....... 3% 1% 8% 8% (20%) (15%)
Experience gains and losses arising
on scheme liabilities:
– amount ....................................... 198 (37) (195) 19 (18) 95
– percentage of the present value
of the scheme liabilities .............. 1% (1%) (1%) 0.4% (0.1%) 2%
Total amount recognised in the
statement of total consolidated
gains and losses:
– amount ....................................... (627) (262) (1,186) 277 (1,441) (356)
– percentage of the present value
of the scheme liabilities .............. (3%) (4%) (7%) 5% (12%) (9%)
Most of the employees of HSBC Holdings are members of the HSBC Bank (UK) Pension Scheme. HSBC
Holdings is unable to identify the share of the underlying assets and liabilities of this scheme which are
attributable to its employees and is therefore accounting for the scheme as if it were a defined contribution
scheme.
(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, France and Brazil. The charge relating to these schemes is
US$106 million for the year (2003: US$54 million, 2002: US$54 million). The schemes are unfunded,
except for the scheme in Mexico which had assets of US$79 million at 31 December 2004 (2003:
US$68 million; 2002: US$13 million) comprising US$61 million in equities (2003: nil; 2002:
US$2 million), US$18 million in bonds (2003: US$52 million; 2002: US$6 million) and US$nil in cash
(2003: US$16 million; 2002: US$5 million). The latest full actuarial valuations of the liability were carried