Tesco 2009 Annual Report Download - page 114

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112 FINANCIAL STATEMENTS
Tesco PLC Annual Report and Financial Statements 2009
Note 28 Post-employment benefits continued
Changes in the present value of defined benefit obligations are as follows:
2009 2008 2007
£m £m £m
Opening defined benefit obligation (4,927) (4,957) (4,659)
Current service cost (428) (461) (466)
Interest cost (313) (254) (221)
Gain on change of assumptions 760 672 71
Experience losses (117) (21) (41)
Foreign currency translation (13) (8) 4
Benefits paid 132 112 104
Actual member contributions (8) (7) (7)
Past service gains – – 258
Acquisitions through business combinations – (3) –
Closing defined benefit obligation (4,914) (4,927) (4,957)
The amounts that have been charged to the Group Income Statement and Group Statement of Recognised Income and Expense for the year ended
28 February 2009 are set out below:
2009 2008 2007
£m £m £m
Analysis of the amount (charged)/credited to operating profit:
Current service cost (428) (461) (466)
Past service gains – – 258
Total charge to operating profit (428) (461) (208)
Analysis of the amount credited/(charged) to finance income:
Expected return on pension schemes’ assets 338 301 255
Interest on pension schemes’ liabilities (313) (254) (221)
Net pension finance income (note 5) 25 47 34
Total charge to the Group Income Statement (403) (414) (174)
In 2007, in line with changes to the Finance Act 2006, the scheme rules were amended from 6 April 2006 to allow employees to commute (convert)
a larger proportion of their pension for a cash lump sum at retirement. Accordingly, the assumptions made in calculating the Group’s defined benefit
pension liability have been revised, resulting in a gain of £250m being recognised in Group operating profit in 2006/7. Revisions to this assumption will
be reflected in the Group Statement of Recognised Income and Expense. Changes to scheme rules in the Republic of Ireland affecting early retirement
have reduced pension liabilities by a further £8m, which was also shown as a past service gain in the Group Income Statement in 2006/7.
2009 2008 2007
£m £m £m
Analysis of the amount recognised in the Group Statement of Recognised Income and Expense:
Actual return less expected return on pension schemes’ assets (1,270) (465) 82
Experience losses arising on the schemes’ liabilities (117) (21) (41)
Foreign currency translation (2) 1 2
Changes in assumptions underlying the present value of the schemes’ liabilities 760 672 71
Total (loss)/gain recognised in the Group Statement of Recognised Income and Expense (629) 187 114
The cumulative losses recognised through the Group Statement of Recognised Income and Expense since the date of transition to IFRS are £1,001m
(2008 – £372m).
Notes to the Group financial statements continued