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v3.19.3.a.u2

Post-retirement benefits (Tables) | 12 Months Ended
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Dec. 31, 2019
Disclosure of information about defined benefit plans [abstract] |
Summary of fair value of plan assets | The proportions of the total fair value of assets in the pension plans for each asset class at the balance sheet date were:
| 2019 | 2018
Equities | 20.4 | % |  | 20.7 | % |
– Quoted |  | 17.0 | % |  | 16.7 | %
– Private |  | 3.4 | % |  | 4.0 | %
Bonds | 63.4 | % |  | 63.6 | % |
– Government fixed income |  | 18.4 | % |  | 18.0 | %
– Government inflation-linked |  | 16.2 | % |  | 15.5 | %
– Corporate and other publicly quoted |  | 24.1 | % |  | 27.1 | %
– Private |  | 4.7 | % |  | 3.0 | %
Property | 8.8 | % |  | 11.0 | % |
– Quoted property funds |  | 3.4 | % |  | 5.1 | %
– Unquoted property funds |  | 5.4 | % |  | 5.9 | %
Qualifying insurance policies | 3.1 | % |  | 0.1 | % |
Cash & other | 4.3 | % |  | 4.6 | % |
Total | 100.0 | % |  | 100.0 | % |
Summary of maturity of defined benefit obligations | An approximate analysis of the maturity of the obligations is given in the table below:
| Pension benefits |  | Other benefits |  | 2019 Total |  | 2018 Total |  | 2017 Total |
Proportion relating to current employees | 20 | % | 19 | % | 20 | % | 19 | % | 20 | %
Proportion relating to former employees not yet retired | 12 | % | 0 | % | 12 | % | 11 | % | 11 | %
Proportion relating to retirees | 68 | % | 81 | % | 68 | % | 70 | % | 69 | %
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | %
Average duration of obligations (years) | 14.5 |  | 13.4 |  | 14.4 |  | 13.4 |  | 13.9 |
Summary of geographical distribution of defined benefit obligations | An approximate analysis of the geographic distribution of the obligations is given in the table below:
| Pension benefits |  | Other benefits |  | 2019 Total |  | 2018 Total |  | 2017 Total |
Canada | 54 | % | 44 | % | 53 | % | 48 | % | 49 | %
UK | 30 | % | 2 | % | 28 | % | 28 | % | 27 | %
US | 7 | % | 51 | % | 10 | % | 14 | % | 14 | %
Switzerland | 5 | % | 0 | % | 5 | % | 5 | % | 5 | %
Other | 4 | % | 3 | % | 4 | % | 5 | % | 5 | %
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | %
Summary of total expense recognised in the income statement | Total expense recognised in the income statement
| Pension benefits US$m |  | Other benefits US$m |  | 2019 Total US$m |  | 2018 Total US$m |  | 2017 Total US$m |
Current employer service cost for defined benefit plans | (119 | ) | (6 | ) | (125 | ) | (165 | ) | (155 | )
Past service (cost)/income | — |  | — |  | — |  | (36 | ) | 4 |
Curtailment gains | — |  | — |  | — |  | 2 |  | 1 |
Settlement gains | 51 |  | — |  | 51 |  | 5 |  | 1 |
Net interest on net defined benefit liability | (22 | ) | (36 | ) | (58 | ) | (79 | ) | (79 | )
Non-investment expenses paid from the plans | (14 | ) | — |  | (14 | ) | (15 | ) | (17 | )
Total defined benefit expense | (104 | ) | (42 | ) | (146 | ) | (288 | ) | (245 | )
Current employer service cost for defined contribution and industry-wide plans | (235 | ) | (3 | ) | (238 | ) | (244 | ) | (255 | )
Total expense recognised in the income statement | (339 | ) | (45 | ) | (384 | ) | (532 | ) | (500 | )
Summary of total amount recognised in other comprehensive income before tax | Total amount recognised in other comprehensive income before tax
| 2019 US$m |  | 2018 US$m |  | 2017 US$m |
Actuarial (losses)/gains | (1,295 | ) | 1,382 |  | (855 | )
Return on assets (net of interest on assets) | 1,033 |  | (527 | ) | 894 |
Gain/(loss) on application of asset ceiling | — |  | 52 |  | (33 | )
Total (loss)/gain recognised in other comprehensive income | (262 | ) | 907 |  | 6 |
Summary of amount recognised in balance sheet | The following amounts were measured in accordance with IAS 19 at 31 December:
| Pension benefits US$m |  | Other benefits US$m |  | 2019 Total US$m |  | 2018 Total US$m |
Total fair value of plan assets | 13,923 |  | — |  | 13,923 |  | 13,203 |
Present value of obligations – funded | (14,311 | ) | — |  | (14,311 | ) | (13,482 | )
Present value of obligations – unfunded | (443 | ) | (899 | ) | (1,342 | ) | (1,272 | )
Present value of obligations – total | (14,754 | ) | (899 | ) | (15,653 | ) | (14,754 | )
Effect of asset ceiling | — |  | — |  | — |  | — |
Net deficit to be shown in the balance sheet | (831 | ) | (899 | ) | (1,730 | ) | (1,551 | )
Comprising: |  |  |  |
– Deficits | (1,815 | ) | (899 | ) | (2,714 | ) | (2,486 | )
– Surpluses | 984 |  | — |  | 984 |  | 935 |
Net deficits on pension plans | (831 | ) | — |  | (831 | ) | (680 | )
Unfunded post-retirement healthcare obligation | — |  | (899 | ) | (899 | ) | (871 | )
Summary of funding policy and contributions to plans |
| Pension benefits US$m |  | Other benefits US$m |  | 2019 Total US$m |  | 2018 Total US$m |  | 2017 Total US$m |
Contributions to defined benefit plans | 223 |  | 34 |  | 257 |  | 248 |  | 404 |
Contributions to defined contribution plans | 232 |  | 3 |  | 235 |  | 244 |  | 243 |
Contributions to industry-wide plans | — |  | — |  | — |  | — |  | 12 |
Total | 455 |  | 37 |  | 492 |  | 492 |  | 659 |
Summary of movement in net defined benefit liability | The amounts shown below include, where appropriate, 100% of the costs, contributions, gains and losses in respect of employees who participate in the plans and who are employed in associates and joint arrangements. Consequently, the costs, contributions, gains and losses may not correspond directly to the amounts disclosed above in respect of the Group. Defined contribution plans and industry-wide plans are excluded from the movements below.
| Pension benefits US$m |  | Other benefits US$m |  | 2019 Total US$m |  | 2018 Total US$m |
Change in the net defined benefit liability |  |  |  |
Net defined benefit liability at the start of the year | (680 | ) | (871 | ) | (1,551 | ) | (2,499 | )
Amounts recognised in Income statement | (104 | ) | (42 | ) | (146 | ) | (288 | )
Amounts recognised in Other comprehensive income | (259 | ) | (3 | ) | (262 | ) | 907 |
Employer contributions | 223 |  | 34 |  | 257 |  | 248 |
Arrangements added/divested | (5 | ) | — |  | (5 | ) | (10 | )
Assets transferred to defined contribution section | (3 | ) | — |  | (3 | ) | — |
Currency exchange rate loss | (3 | ) | (17 | ) | (20 | ) | 91 |
Net defined benefit liability at the end of the year | (831 | ) | (899 | ) | (1,730 | ) | (1,551 | )
| Pension benefits US$m |  | Other benefits US$m |  | 2019 Total US$m |  | 2018 Total US$m |
Change in present value of obligation |  |  |  |
Present value of obligation at the start of the year | (13,883 | ) | (871 | ) | (14,754 | ) | (17,645 | )
Current employer service costs | (119 | ) | (6 | ) | (125 | ) | (165 | )
Past service cost | — |  | — |  | — |  | (36 | )
Curtailments | — |  | — |  | — |  | 2 |
Settlements | 638 |  | — |  | 638 |  | 299 |
Interest on obligation | (440 | ) | (36 | ) | (476 | ) | (503 | )
Contributions by plan participants | (23 | ) | — |  | (23 | ) | (24 | )
Benefits paid | 828 |  | 34 |  | 862 |  | 915 |
Experience gains | 48 |  | 63 |  | 111 |  | 32 |
Changes in financial assumptions (loss)/gain | (1,355 | ) | (92 | ) | (1,447 | ) | 1,349 |
Changes in demographic assumptions gain | 15 |  | 26 |  | 41 |  | 1 |
Arrangements (added)/divested | (5 | ) | — |  | (5 | ) | 94 |
Currency exchange rate (loss)/gain | (458 | ) | (17 | ) | (475 | ) | 927 |
Present value of obligation at the end of the year | (14,754 | ) | (899 | ) | (15,653 | ) | (14,754 | )
44 Post-retirement benefits continued
| Pension benefits US$m |  | Other benefits US$m |  | 2019 Total US$m |  | 2018 Total US$m |
Change in plan assets |  |  |  |
Fair value of plan assets at the start of the year | 13,203 |  | — |  | 13,203 |  | 15,257 |
Settlements | (587 | ) | — |  | (587 | ) | (294 | )
Interest on assets | 418 |  | — |  | 418 |  | 434 |
Contributions by plan participants | 23 |  | — |  | 23 |  | 24 |
Contributions by employer | 223 |  | 34 |  | 257 |  | 248 |
Benefits paid | (828 | ) | (34 | ) | (862 | ) | (915 | )
Non-investment expenses | (14 | ) | — |  | (14 | ) | (15 | )
Return on plan assets (net of interest on assets) | 1,033 |  | — |  | 1,033 |  | (527 | )
Arrangements divested | — |  | — |  | — |  | (161 | )
Assets transferred to defined contribution section | (3 | ) | — |  | (3 | ) | — |
Currency exchange rate gain/(loss) | 455 |  | — |  | 455 |  | (848 | )
Fair value of plan assets at the end of the year | 13,923 |  | — |  | 13,923 |  | 13,203 |
| Pension benefits US$m |  | Other benefits US$m |  | 2019 Total US$m |  | 2018 Total US$m |
Change in the effect of the asset ceiling |  |  |  |
Effect of the asset ceiling at the start of the year | — |  | — |  | — |  | (111 | )
Interest on the effect of the asset ceiling | — |  | — |  | — |  | (10 | )
Movement in the effect of the asset ceiling | — |  | — |  | — |  | 52 |
Arrangements divested and other transfers | — |  | — |  | — |  | 57 |
Currency exchange rate gain | — |  | — |  | — |  | 12 |
Effect of the asset ceiling at the end of the year | — |  | — |  | — |  | — |
Summary of main assumptions rate for valuations of plans and sensitivity analysis |
| Canada |  | UK |  | US |  | Switzerland |
At 31 December 2019 |  |  |  |
Discount rate | 3.1 | % | 2.0 | % | 3.1 | % | 0.2 | %
Inflation(a) | 1.6 | % | 2.9 | % | 2.0 | % | 1.1 | %
Rate of increase in pensions | 0.1 | % | 2.5 | % | 0.0 | % | 0.2 | %
Rate of increase in salaries | 2.8 | % | 3.5 | % | 3.5 | % | 2.1 | %
At 31 December 2018 |  |  |  |
Discount rate | 3.9 | % | 2.8 | % | 4.2 | % | 0.7 | %
Inflation(a) | 1.6 | % | 3.3 | % | 2.0 | % | 1.2 | %
Rate of increase in pensions | 0.2 | % | 2.9 | % | 0.0 | % | 0.0 | %
Rate of increase in salaries | 2.9 | % | 3.7 | % | 3.5 | % | 2.2 | %
(a) | The inflation assumption shown for the UK is for the Retail Price Index. The assumption for the Consumer Price Index at 31 December 2019 was 2.0% (2018: 2.2%).
The main financial assumptions used for the healthcare plans, which are predominantly in the US and Canada, were: discount rate: 3.3% (2018: 4.2%); medical trend rate: 6.1% reducing to 4.6% by the year 2029 broadly on a straight line basis (2018: 7.6%, reducing to 4.6% by the year 2029); claims costs based on individual company experience. For both the pension and healthcare arrangements the post-retirement mortality assumptions allow for future improvements in longevity. The mortality tables used imply that a man aged 60 at the balance sheet date has a weighted average expected future lifetime of 27 years (2018: 27 years) and that a man aged 60 in 2039 would have a weighted average expected future lifetime of 28 years (2018: 28 years).
|  | 2019 | 2018
|  | Approximate (increase)/decrease in obligations | Approximate (increase)/decrease in obligations
Assumption | Change in assumption | Pensions US$m |  | Other US$m |  | Pensions US$m |  | Other US$m |
Discount rate | Increase of 0.5 percentage points | 894 |  | 56 |  | 782 |  | 51 |
Decrease of 0.5 percentage points | (1,057 | ) | (60 | ) | (832 | ) | (55 | )
Inflation | Increase of 0.5 percentage points | (447 | ) | (17 | ) | (389 | ) | (17 | )
Decrease of 0.5 percentage points | 422 |  | 15 |  | 369 |  | 15 |
Salary increases | Increase of 0.5 percentage points | (55 | ) | (1 | ) | (46 | ) | (1 | )
Decrease of 0.5 percentage points | 54 |  | 1 |  | 45 |  | 1 |
Demographic – allowance for future improvements in longevity | Participants assumed to have the mortality rates of individuals who are one year older | 443 |  | 18 |  | 381 |  | 18 |
Participants assumed to have the mortality rates of individuals who are one year younger | (465 | ) | (18 | ) | (381 | ) | (18 | )

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- Definition The disclosure of information about the maturity profile of a defined benefit obligation. This will include the weighted average duration of the defined benefit obligation and may include other information about the distribution of the timing of benefit payments, such as a maturity analysis of the benefit payments. [Refer: Defined benefit obligation, at present value] + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 19 -IssueDate 2019-01-01 -Paragraph 147 -Subparagraph c -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=19&code=ifrs-tx-2019-en-r&anchor=para_147_c&doctype=Standard -URIDate 2019-03-27 + Details
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- Definition The disclosure of a sensitivity analysis for significant actuarial assumptions used to determine the present value of a defined benefit obligation. [Refer: Actuarial assumptions [member]; Defined benefit obligation, at present value] + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 19 -IssueDate 2019-01-01 -Paragraph 145 -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=19&code=ifrs-tx-2019-en-r&anchor=para_145&doctype=Standard -URIDate 2019-03-27 + Details
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- Definition The disclosure of geographical distribution of defined benefit obligations. + References No definition available. + Details
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