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Notes to the Consolidated Financial Statements Vodafone Group Plc 121Annual Report & Accounts and Form 20-F
United Kingdom schemes
The main scheme’s assets are held in a separate trustee-administered fund. This scheme is subject to quarterly funding updates by independent actuaries
and to formal actuarial valuations at least every three years. The most recent formal valuation of this scheme was carried out as at 31 March 2001 using
market based principles and the projected unit funding method of valuation including allowance for projected earnings growth. In addition there is an
internally funded unapproved defined benefit plan in place for a small number of senior executives. The pension cost of this arrangement is included in the
summary information shown above.
At 31 March 2001, the market value of the main scheme of £177m was sufficient to cover 84% of the benefits accrued to members as valued using the
above assumptions. Against the shortfall at 31 March 2001 the UK companies have already made special lump sum contributions totalling £22m. In addition,
the UK companies continue to make contributions significantly in excess of the cost of the benefits being earned each year. Using consistent assumptions to
those outlined above the updated funding level as at 31 March 2002 has been estimated as 98%. Based on this estimate a continuation of the current
contribution level is expected to result in a fully funded position by 30 September 2002.
As a result of the acceleration of payments a net prepayment of £54m (2001: £24m) is included in debtors due after more than one year, representing the
excess of the amounts funded over accumulated pension costs.
Germany
The Group’s pension obligations in relation to employees in Germany are not generally funded with any shortfall in external funding being accrued
within provisions.
The German schemes are subject to annual valuations, with the last formal valuation prepared at 1 April 2001, and are undertaken by independent actuaries
using the projected unit funding method of valuation.
There are a number of separate schemes in Germany only one of which is funded externally. At 1 April 2001, the total pension liability for the internally
funded benefits was £133m. The total pension liability for the externally funded benefits was £7m and the market value of the scheme’s assets for the
externally funded benefits also amounted to £7m.
An amount of £135m (2001: £136m) is included in provisions for liabilities and charges, representing the excess of the accumulated pension costs over the
amounts funded externally and reflects the internally funded nature of the principal arrangements.
Japan
The Group’s pension obligations in relation to employees in Japan are not generally funded, with any shortfall in external funding being accrued
within provisions.
The Japanese schemes are subject to valuations at intervals of between one and two years, with the last formal valuations being prepared at 31 March
2001. These have been undertaken by independent actuaries using the projected unit funding method of valuation.
There are a number of separate schemes in Japan only one of which is funded externally. At the date of acquisition, the total pension liability for the
internally funded benefits was estimated at £94m. The total pension liability for the externally funded benefits using the assumptions detailed above was
£5m and the market value of the scheme’s assets for the externally funded benefits amounted to £1m representing a percentage cover of accrued benefits
for members of 20%.
An amount of £92m is included in provisions for liabilities and charges, representing the excess of the accumulated pension costs over the amounts funded
externally and reflects the internally funded nature of the principal arrangements.