27 Pension commitments and other post-retirement obligations

	Note	2009 £m	2008 £m
Non-current assets
Retirement benefit assets	a	–	53.4
Non-current liabilities
Retirement benefit liabilities	a	(24.2)	(14.0)
Post-retirement medical benefits	b	(11.1)	(8.0)
		(35.3)	(22.0)

The following actuarial (losses)/gains were recognised in the year through the Consolidated Statement of Recognised Income and Expense following the year end valuations of the Group’s pension and post-retirement plans:

	2009 (52 weeks) £m	2008 (53 weeks) £m
Defined benefit pension plans
– US	(74.8)	(6.1)
– UK	(9.9)	5.0
– Other	(0.3)	–
Post-retirement medical benefits	(0.1)	(0.7)
	(85.1)	(1.8)

a) Pensions

	2009 (52 weeks) £m	2008 (53 weeks) £m
Pension (charge)/credit from continuing operations
Defined benefit plans
– UK	(0.5)	(0.3)
– US	2.8	2.9
– Other plans	(0.1)	(0.1)
Defined contribution plans	(2.5)	(2.3)
Net pension (charge)/credit from continuing operations	(0.3)	0.2
Pension charge from discontinued operations (defined contribution plans)	–	(0.1)
Defined benefit balance sheet (liability)/asset:
– UK plan	(20.5)	(13.5)
– US plan	(2.8)	53.4
– Other plans	(0.9)	(0.5)
	(24.2)	39.4

The disclosures relating to the UK and US defined benefit plans are set out below, based on valuations performed by Watson Wyatt Worldwide, Actuaries and Pension Consultants, as at 1 February 2009, using the projected unit credit method.

The principal assumptions are as follows:

	UK Plan 2009 %	UK Plan 2008 %	US Plan 2009 %	US Plan 2008 %
Rate of increase in pensionable salaries	4.1	5.0	3.0	4.5
Rate of increase in pensions in payment (where applicable)	2.9	3.0	3.3	3.5
Discount rate	6.6	6.2	6.5	6.5
Inflation assumption	3.5	3.5	1.8	3.0
Expected return on plan assets
– equities	7.8	7.8	8.5	7.8
– gilt bonds	4.4	4.5	2.9	–
– corporate bonds	6.0	6.2	7.5	–
– cash/other	5.0	5.0	2.9	4.4
– weighted average	6.7	6.7	7.1	7.8
Life expectancy of a 60 year old male/female current retiree	26 yrs/29 yrs	25 yrs/28 yrs	24 yrs/26 yrs	24 yrs/26 yrs
Life expectancy of a 60 year old male/female future retiree	27 yrs/29 yrs	26 yrs/29 yrs	25 yrs/26 yrs	25 yrs/26 yrs

The expected return for each asset class is based on a combination of historical performance analysis, the forward looking views of the financial markets (as suggested by available yields), and the views of investment organisations.

For 2009, the rates of longevity for the UK Plan are based on standard tables known as the 2000 series with long cohort improvements from 2000 and a plus 2 year age rating (2008: based on standard tables PA92, projected to the year 2005, with an age rating of minus three years applied for non pensioners and minus two years for pensioners).

For the US Plan, for 2009 and 2008 the rates of longevity are based on standard tables RP 2000 with generational projections using scale AA.

The amounts recognised in the balance sheet are determined as follows:

	UK Plan 2009 £m	UK Plan 2008 £m	UK Plan 2007 £m	UK Plan 2006 £m	UK Plan 2005 £m	US Plan 2009 £m	US Plan 2008 £m	US Plan 2007 £m	US Plan 2006 £m	US Plan 2005 £m
Present value of defined benefit obligations	(73.8)	(77.6)	(85.2)	(89.6)	(73.4)	(118.2)	(85.4)	(85.7)	(91.9)	(81.0)
Fair value of plan assets	53.3	64.1	63.6	60.0	52.5	115.4	138.8	142.5	143.9	125.3
Net (liability)/asset	(20.5)	(13.5)	(21.6)	(29.6)	(20.9)	(2.8)	53.4	56.8	52.0	44.3

The major categories of plan assets as a percentage of total plan assets are as follows:

	UK Plan 2009 %	UK Plan 2008 %	US Plan 2009 %	US Plan 2008 %
Equities	58.5	56.5	58.0	99.0
Gilt bonds	20.1	21.6	20.0	–
Corporate bonds	19.7	20.7	20.0	–
Cash/other	1.7	1.2	2.0	1.0

The UK plan invests predominately in equities and gilts on an index-tracking basis. The UK equity index-tracking fund constitutes 40% of the pension scheme’s investment benchmark and will include a holding of Premier Farnell shares in the ratio of Premier Farnell’s market capitalisation to the market capitalisation of the UK FT-Actuaries All Share Index. The US plan assets at 1 February 2009 include ordinary shares issued by Premier Farnell plc with a fair value of £3.2 million (3 February 2008: £3.5 million).

The amounts recognised in the income statement are as follows:

	UK Plan 2009 (52 weeks) £m	UK Plan 2008 (53 weeks) £m	US Plan 2009 (52 weeks) £m	US Plan 2008 (53 weeks) £m
Current service cost	(0.1)	(0.1)	(3.0)	(2.8)
Interest cost	(4.7)	(4.4)	(6.0)	(5.0)
Expected return on plan assets	4.3	4.2	11.8	10.8
Past service costs	–	–	–	(0.1)
Total (charge)/income (included in operating expenses)	(0.5)	(0.3)	2.8	2.9

Changes in the present value of the defined benefit obligation are as follows:

	UK Plan 2009 £m	UK Plan 2008 £m	US Plan 2009 £m	US Plan 2008 £m
Beginning of year	(77.6)	(85.2)	(85.4)	(85.7)
Current service cost	(0.1)	(0.1)	(3.0)	(2.8)
Interest cost	(4.7)	(4.4)	(6.0)	(5.0)
Actuarial gains	5.3	8.9	5.0	4.2
Actual benefit payments	3.3	3.2	3.6	3.5
Past service costs	–	–	–	(0.1)
Currency translation adjustment	–	–	(32.4)	0.5
End of year	(73.8)	(77.6)	(118.2)	(85.4)

Changes in the fair value of plan assets are as follows:

	UK Plan 2009 £m	UK Plan 2008 £m	US Plan 2009 £m	US Plan 2008 £m
Beginning of year	64.1	63.6	138.8	142.5
Expected return on plan assets	4.3	4.2	11.8	10.8
Contributions	3.4	3.4	–	–
Actual benefits paid	(3.3)	(3.2)	(3.6)	(3.5)
Actuarial losses	(15.2)	(3.9)	(79.8)	(10.3)
Currency translation adjustment	–	–	48.2	(0.7)
End of year	53.3	64.1	115.4	138.8
Actual return on plan assets	(10.9)	0.3	(68.0)	0.5

Analysis of the movement in the balance sheet (liability)/asset:

	UK Plan 2009 £m	UK Plan 2008 £m	US Plan 2009 £m	US Plan 2008 £m
(Liability)/asset at beginning of year	(13.5)	(21.6)	53.4	56.8
Total (expense)/income as above	(0.5)	(0.3)	2.8	2.9
Contributions	3.4	3.4	–	–
Net actuarial (losses)/gains recognised in the year	(9.9)	5.0	(74.8)	(6.1)
Currency translation adjustment	–	–	15.8	(0.2)
(Liability)/asset at end of year	(20.5)	(13.5)	(2.8)	53.4

Cumulative actuarial losses recognised in equity:

	UK Plan 2009 £m	UK Plan 2008 £m	US Plan 2009 £m	US Plan 2008 £m
Beginning of year	(3.1)	(8.1)	(7.0)	(0.9)
Net actuarial (losses)/gains recognised in the year	(9.9)	5.0	(74.8)	(6.1)
End of year	(13.0)	(3.1)	(81.8)	(7.0)

History of experience gains and losses:

	UK Plan 2009	UK Plan 2008	UK Plan 2007	UK Plan 2006	UK Plan 2005	US Plan 2009	US Plan 2008	US Plan 2007	US Plan 2006	US Plan 2005
(Loss)/gain on plan assets:
Amount (£m)	(15.2)	(3.9)	0.1	6.1	2.0	(79.6)	(10.3)	5.5	3.4	7.9
Percentage of plan assets	(28.5%)	(6.1%)	0.2%	10.2%	3.8%	(69.0%)	(7.4%)	3.9%	2.4%	6.3%
Experience gains/(losses) on defined benefit obligations:
Amount (£m)	1.4	(0.5)	0.1	(5.4)	0.2	(0.8)	(0.5)	(0.5)	(1.9)	(0.1)
Percentage of the present value of the plan liabilities	1.9%	(0.6%)	0.1%	(6.0%)	0.3%	(0.7%)	(0.6%)	(0.6%)	(2.1%)	(0.1%)
Gains/(losses) from change in assumptions:
Amount (£m)	3.9	9.4	5.4	(9.6)	(7.0)	5.6	4.7	2.1	0.4	(17.7)
Percentage of the present value of plan liabilities	5.3%	12.1%	6.3%	(10.7%)	(9.5%)	4.7%	5.5%	2.4%	0.4%	(21.9%)

The contributions expected to be paid during the financial year ended 31 January 2010 amount to £3.1 million in respect of the UK Plan and nil in respect of the US Plan.

b) Post-retirement medical benefits

In the US, the Group provides unfunded post-retirement medical benefits to certain US employees. The method of accounting for these is similar to that used to account for pension obligations. The charge for the year was £0.6 million (2008: £0.5 million) and the balance sheet obligation at 1 February 2009 amounted to £11.1 million (2008: £8.0 million).

The disclosures relating to post-retirement medical benefits are based on an actuarial valuation performed by Watson Wyatt Worldwide, Actuaries and Pension Consultants, as at 1 February 2009.

The principal assumptions were as follows:

	2009 %	2008 %
Discount rate	6.5	6.5
Medical inflation	5.0*	5.0*
Life expectancy of a 60 year old male current retiree	24 yrs	24 yrs
Life expectancy of a 60 year old male future retiree	25 yrs	25 yrs

* The assumed long-term rate of medical inflation is 5.0% per annum. In 2009, the initial rate has been assumed to be 9.0% which is assumed to reduce to the long-term rate at 0.5% per annum over 8 years. In 2008, the initial rate was 9.5% assumed to reduce to the long-term rate at 0.5% per annum over 9 years.

For 2009, future life expectancy is based on RP 2000 mortality tables with generational projections using scale AA.

The amounts recognised in the income statement are as follows:

	2009 (52 weeks) £m	2008 (53 weeks) £m
Service cost	0.1	0.1
Interest cost	0.5	0.4
Total charge (included in operating expenses)	0.6	0.5

Changes in the present value of the defined benefit obligation are as follows:

	2009 £m	2008 £m	2007 £m	2006 £m	2005 £m
Beginning of year	(8.0)	(7.4)	(7.1)	(5.5)	(4.7)
Service cost	(0.1)	(0.1)	(0.2)	(0.2)	(0.3)
Interest cost	(0.5)	(0.4)	(0.5)	(0.4)	(0.6)
Payments	0.5	0.5	0.5	0.5	0.4
Actuarial losses	(0.1)	(0.7)	(0.8)	(1.1)	–
Currency translation adjustment	(2.9)	0.1	0.7	(0.4)	(0.3)
End of year	(11.1)	(8.0)	(7.4)	(7.1)	(5.5)

Cumulative actuarial gains and losses recognised in equity:

	2009 £m	2008 £m
Beginning of year	(2.6)	(1.9)
Net actuarial losses recognised in the year	(0.1)	(0.7)
End of year	(2.7)	(2.6)

The effect of a 1% movement in the assumed medical cost trend rate is as follows:

	Increase £m	Decrease £m
Increase/(decrease) in the aggregate of the current service cost and interest cost	0.1	(0.1)
Increase/(decrease) in the defined benefit obligation	1.4	(1.4)

History of experience gains and losses:

	2009	2008	2007	2006
Experience losses on defined benefit obligation:
Amount (£m)	(0.1)	(0.9)	(0.3)	(0.4)
Percentage of the present value of liabilities	(0.9%)	(11.3%)	(4.1%)	(5.6%)
Gain/(loss) arising from change in assumptions:
Amount (£m)	–	0.2	(0.5)	(0.7)
Percentage of the present value of liabilities	–	2.5%	(6.8%)	(9.9%)