Tesco 2003 Annual Report Download - page 50

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48 TESCO PLC
NOTE 26 Pensions continued
Major assumptions
The major assumptions, on a weighted average basis, used by the actuaries were as follows:
2003 2002
%%
Rate of increase in salaries 3.6 3.6
Rate of increase in pensions in payment 2.3 2.3
Rate of increase in deferred pensions 2.3 2.3
Rate of increase in career average benefits 2.3 2.8
Discount rate 5.5 5.8
Price inflation 2.3 2.3
The assets in the schemes and the expected rates of return were:
2003 2002
Long-term Long-term
rate of Market rate of Market
expected value expected value
return % £m return % £m
Equities 8.6 945 7.7 1,002
Bonds 5.5 386 5.8 433
Property 7.1 88 6.4 91
Other 3.8 87 4.4 48
Total market value of assets 1,506 1,574
Present value of schemes’ liabilities (2,275) (1,758)
Deficit in the schemes (769) (184)
Related deferred tax asset 229 57
Net pension liability (540) (127)
2003 2002
£m £m
Group net assets
Net assets prior to pension adjustments 6,559 5,566
FRS 17 pension liability (540) (127)
6,019 5,439
SSAP 24 pension asset (6) (3)
Net assets after pension adjustments 6,013 5,436
Group reserves
Profit and loss reserve prior to pension adjustments 3,649 3,136
FRS 17 pension liability (540) (127)
3,109 3,009
SSAP 24 pension asset (6) (3)
Profit and loss reserve after pension adjustments 3,103 3,006
notes to the financial statements continued