HSBC 2009 Annual Report Download - page 398

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Note 8
396
Other plans
2009 2008
Expected
rates of return1
Value
Expected
rates of return1 Value
% US$m % US$m
Fair value of plan assets ........................................................... 6,822 6,024
Equities ................................................................................. 8.2 2,302 8.3 1,856
Bonds .................................................................................... 5.0 3,809 5.0 3,261
Property ................................................................................ 6.4 55 6.3 87
Other ..................................................................................... 3.5 656 3.8 820
Defined benefit obligation ........................................................ (9,109) (8,787)
Present value of funded obligations ..................................... (8,588) (8,271)
Present value of unfunded obligations ................................. (521) (516)
Effect of limit on plan surpluses ............................................... (47) (9)
Unrecognised past service cost ................................................. 9 10
Net liability ............................................................................... (2,325) (2,762)
1 The expected rates of return are weighted on the basis of the fair value of the plan assets.
Plan assets of the Group’s pension schemes included US$62 million (2008: US$52 million) of equities and
US$2 million (2008: US$2 million) of bonds issued by HSBC and US$1,925 million (2008: US$2,204 million) of
other assets placed or transacted with HSBC. The fair value of plan assets included derivatives entered into with the
HSBC Bank (UK) Pension Scheme with a positive fair value of US$1,049 million at 31 December 2009 (2008:
US$1,779 million positive fair value) and US$27 million positive fair value (2008: US$388 million positive fair
value) in respect of the HSBC International Staff Retirement Benefits Scheme. Further details of these swap
arrangements are included in Note 43.
Changes in the present value of defined benefit obligations
HSBC Bank (UK) Pension Scheme Other plans
2009 2008 2009 2008
US$m US$m US$m US$m
At 1 January .............................................................................. 15,257 23,512 8,787 8,873
Current service cost .................................................................. 260 387 334 357
Interest cost ............................................................................... 1,019 1,227 397 466
Contributions by employees ..................................................... 5 2 17 40
Actuarial (gains)/losses ............................................................ 4,563 (3,032) (114) 358
Benefits paid ............................................................................. (884) (873) (608) (596)
Past service cost – vested immediately .................................... – – 20 9
Past service cost – unvested benefits ........................................ – – – 10
Disposals ................................................................................... – – – (44)
Business combinations ............................................................. – – 4 –
Reduction in liabilities resulting from curtailments ................. – – (41) (20)
Liabilities extinguished on settlements .................................... (499) – (1) (81)
Exchange differences ................................................................ 1,802 (5,966) 314 (585)
At 31 December ........................................................................ 21,523 15,257 9,109 8,787
Changes in the fair value of plan assets
HSBC Bank (UK) Pension Scheme Other plans
2009 2008 2009 2008
US$m US$m US$m US$m
At 1 January .............................................................................. 14,865 22,704 6,024 7,768
Expected return on plan assets ................................................. 959 1,359 381 549
Contributions by HSBC ............................................................ 367 462 596 238
– normal ................................................................................ 367 462 178 223
– special ................................................................................ ––418 15
Contributions by employees ..................................................... 5 2 17 40
Experience gains/(losses) ......................................................... 871 (2,861) 65 (1,452)
Benefits paid ............................................................................. (884) (873) (522) (576)
Assets distributed on curtailments ............................................ – – (5) –
Assets distributed on settlements ............................................. – – (6) (40)
Exchange differences ................................................................ 1,518 (5,928) 272 (503)
At 31 December ........................................................................ 17,701 14,865 6,822 6,024