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Post-retirement benefits (Tables)
 12 Months Ended
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
)