HSBC 2008 Annual Report Download - page 373

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Changes in the present value of defined benefit obligations
HSBC Bank (UK) Pension Scheme Other plans
2008 2007 2008 2007
US$m US$m US$m US$m
At 1 January .................................................................. 23,512 24,332 8,873 7,916
Current service cost ...................................................... 387 454 357 347
Interest cost ................................................................... 1,227 1,247 466 398
Contributions by employees ......................................... 2 – 40 37
Actuarial (gains)/losses ................................................. (3,032) (2,395) 358 475
Benefits paid ................................................................. (873) (632) (596) (529)
Past service cost – vested immediately ......................... – – 9 6
Past service cost – unvested benefits ............................ – – 10 –
Disposals ....................................................................... – – (44) –
Reduction in liabilities resulting from curtailments ..... – – (20) (63)
Liabilities extinguished on settlements ........................ – – (81) (16)
Exchange differences .................................................... (5,966) 506 (585) 302
At 31 December ............................................................ 15,257 23,512 8,787 8,873
Changes in the fair value of plan assets
HSBC Bank (UK) Pension Scheme Other plans
2008 2007 2008 2007
US$m US$m US$m US$m
At 1 January .................................................................. 22,704 20,587 7,768 7,116
Expected return on plan assets ..................................... 1,359 1,211 549 486
Contributions by HSBC ................................................ 462 1,058 238 211
– normal .................................................................... 462 471 223 199
– special .................................................................... –587 15 12
Contributions by employees ......................................... 2 – 40 37
Experience gains/(losses) ............................................. (2,861) 29 (1,452) 157
Benefits paid ................................................................. (873) (632) (576) (467)
Assets distributed on settlements .................................. – – (40) (17)
Exchange differences .................................................... (5,928) 451 (503) 245
At 31 December ............................................................ 14,865 22,704 6,024 7,768
The actual return on plan assets for the year ended 31 December 2008 was a negative return of US$2,405 million
(2007: positive US$1,883 million). HSBC expects to make US$588 million of contributions to defined benefit
pension plans during 2009. Benefits expected to be paid from the plans to retirees over each of the next five years,
and in aggregate for the five years thereafter, are:
2009 2010 2011 2012 2013 2014-2018
US$m US$m US$m US$m US$m US$m
HSBC Bank (UK) Pension Scheme ..................... 729 766 804 845 887 5,149
Other significant plans .......................................... 435 423 455 489 522 3,093
Total expense recognised in the income statement in ‘Employee compensation and benefits’
HSBC Bank (UK) Pension Scheme Other plans
2008 2007 2006 2008 2007 2006
US$m US$m US$m US$m US$m US$m
Current service cost .................... 387 454 456 357 347 304
Interest cost ................................. 1,227 1,247 1,055 466 398 366
Expected return on plan assets ... (1,359) (1,211) (1,169) (549) (486) (421)
Past service cost .......................... – – – 9 7 11
Gains on curtailments ................. – – – (20) (63) –
(Gains)/losses on settlements ...... – – – (41) 1 –
Total expense .............................. 255 490 342 222 204 260