Retirement benefits (Tables)

12 Months Ended

Dec. 31, 2017

Defined Benefit Plans - Amounts Recognised as Administrative Expenses

In respect of the defined benefit plans, the amounts recognised in the Group income statement, in ‘administrative expenses’, are:


	Pension plans
	UK						US							US Post-employment benefits						Total
	2017 $m		2016 $m		2015 $m		2017 $m		2016 $m		2015 $m			2017 $m		2016 $m		2015 $m		2017 $m		2016 $m		2015 $m
Net interest expense		1		1		1		2		2		3			1		1		1		4		4		5
Administration costs		—		—		1		1		1		1			—		—		—		1		1		2
Settlement gain		—		—		—		—		—		(2	)		—		—		—		—		—		(2	)

Operating profit		1		1		2		3		3		2			1		1		1		5		5		5

Defined Benefit Plans - Amounts Recognised in Other Comprehensive Income

Re-measurement gains and losses recognised in the Group statement of comprehensive income are:


	2017									2016								2015
	Plan assets $m			Plan obligations $m			Total $m			Plan assets $m		Plan obligations $m			Total $m			Plan assets $m			Plan obligations $m		Total $m
Return on plan assets (excluding amounts included in interest)		9			—			9			—		—			—			(7	)		—		(7	)
Actuarial gains and losses arising from changes in:
Demographic assumptions		—			1			1			—		6			6			—			5		5
Financial assumptions		—			(9	)		(9	)		—		(11	)		(11	)		—			10		10
Experience adjustments		—			(2	)		(2	)		—		1			1			—			2		2
Change in asset restriction (excluding amounts included in interest)		(3	)		—			(3	)		—		—			—			3			—		3

Other comprehensive income		6			(10	)		(4	)		—		(4	)		(4	)		(4	)		17		13

Defined Benefit Plans - Summary of Amounts Recognised on the Balance Sheet

The assets and liabilities of the schemes and the amounts recognised in the Group statement of financial position are:


	Pension plans
	UK						US						US Post-employment benefits						Total
	2017 $m			2016 $m			2017 $m			2016 $m			2017 $m			2016 $m			2017 $m			2016 $m
Retirement benefit assets
Fair value of plan assets		—			—			152			—			—			—			152			—
Present value of benefit obligations		—			—			(146	)		—			—			—			(146	)		—
Surplus in schemes		—			—			6			—			—			—			6			—
Asset restriction		—			—			(3	)		—			—			—			(3	)		—

Total retirement benefit assets		—			—			3			—			—			—			3			—

Retirement benefit obligations
Fair value of plan assets		—			—			—			148			—			—			—			148
Present value of benefit obligations		(29	)		(27	)		(51	)		(195	)		(24	)		(22	)		(104	)		(244	)

Total retirement benefit obligations		(29	)		(27	)		(51	)		(47	)		(24	)		(22	)		(104	)		(96	)

Total fair value of plan assets		—			—			152			148			—			—			152			148

Total present value of benefit obligations		(29	)		(27	)		(197	)		(195	)		(24	)		(22	)		(250	)		(244	)

Summary of Principal Financial Assumptions Used to Determine Benefit Obligations

The principal financial assumptions used by the actuaries to determine the benefit obligations are:


	Pension plans
	UK						US						US Post-employment benefits
	2017 %		2016 %		2015 %		2017 %		2016 %		2015 %		2017 %		2016 %		2015 %
Pensions increases		3.2		3.3		3.2		—		—		—		—		—		—
Discount rate		2.6		2.7		4.0		3.3		3.7		3.9		3.3		3.8		3.9
Inflation rate		3.2		3.3		3.2		—		—		—		—		—		—
Healthcare cost trend rate assumed for next year:
Pre-65 (ultimate rate reached in 2025)														7.7		7.0		7.5
Post-65 (ultimate rate reached in 2024)														8.7		8.3		9.0
Ultimate rate that the cost trend rate trends to														4.5		4.5		4.5

Defined Benefit Plans - Life Expectancy Assumptions at Retirement Age

In both the UK and US, the assumptions have been revised during the year to reflect life expectancy at retirement age as follows:


	Pension plans
	UK						US
	2017 Years		2016 Years		2015 Years		2017 Years		2016 Years		2015 Years
Current pensioners at 65^a — male		24		24		26		21		21		21
— female		26		26		29		23		23		23
Future pensioners at 65^b — male		25		25		28		22		22		23
— female		28		28		31		24		24		25

^a	Relates to assumptions based on longevity (in years) following retirement at the end of the reporting period.

^b	Relates to assumptions based on longevity (in years) relating to an employee retiring in 2037.

Defined Benefit Plans - Sensitivity Analysis of Actuarial Assumptions

The sensitivity analysis below is based on extrapolating reasonable changes in these assumptions, using year-end conditions and assuming no interdependency between the assumptions.

Higher/
(lower)
pension
cost
$m

Increase/
(decrease)
in liabilities
$m

Higher/
(lower)
pension
cost
$m

Increase/
(decrease)
in liabilities
$m

Pensions increases

— 0.25% decrease

(0.1

)

(1.1

)

—

— 0.25% increase

—

1.4

—

Discount rate

— 0.25% decrease

(0.1

)

1.5

(0.1

)

2.9

— 0.25% increase

—

(1.4

)

—

(2.7

)

Inflation rate

— 0.25% increase

—

1.4

—

— 0.25% decrease

(0.1

)

(1.1

)

—

Mortality rate

— One year increase

—

0.8

0.2

9.7

Summary of Movement in Benefit Obligation

Movement in benefit obligation


	Pension plans												US Post-employment
	UK						US						benefits						Total
	2017 $m			2016 $m			2017 $m			2016 $m			2017 $m			2016 $m			2017 $m			2016 $m
Benefit obligation at 1 January		27			27			195			202			22			21			244			250
Interest expense		1			1			7			7			1			1			9			9
Benefits paid		(1	)		—			(13	)		(13	)		(1	)		(1	)		(15	)		(14	)
Re-measurement losses		—			4			8			(1	)		2			1			10			4
Exchange adjustments		2			(5	)		—			—			—			—			2			(5	)

Benefit obligation at 31 December		29			27			197			195			24			22			250			244

Comprising:
Funded plans		—			—			146			145			—			—			146			145
Unfunded plans		29			27			51			50			24			22			104			99

		29			27			197			195			24			22			250			244

Movement in plan assets


	Pension plans
	UK					US						US Post-employment benefits						Total
	2017 $m			2016 $m		2017 $m			2016 $m			2017 $m			2016 $m			2017 $m			2016 $m
Fair value of plan assets at 1 January		—			—		148			121			—			—			148			121
Company contributions		1			—		4			36			1			1			6			37
Benefits paid		(1	)		—		(13	)		(13	)		(1	)		(1	)		(15	)		(14	)
Interest income		—			—		5			5			—			—			5			5
Re-measurement gains		—			—		9			—			—			—			9			—
Administration costs		—			—		(1	)		(1	)		—			—			(1	)		(1	)

Fair value of plan assets at 31 December		—			—		152			148			—			—			152			148

Summary of Plan Assets Measured at Fair Value

The plan assets are measured at fair value and comprise the following:


	US
	2017 $m		2016 $m
Investments quoted in active markets
Investment funds: fixed income securities		150		146
Unquoted investments
Cash		2		2

		152		148

Summary of Movement in Asset Restriction


	Pension plans								US Post-employment benefits
	UK				US				US Post-employment benefits				Total
	2017 $m		2016 $m		2017 $m		2016 $m		2017 $m		2016 $m		2017 $m		2016 $m
Movement in asset restriction
Balance at 1 January		—		—		—		—		—		—		—		—
Re-measurement losses		—		—		3		—		—		—		3		—

Balance at 31 December		—		—		3		—		—		—		3		—

Summary of Estimated Future Benefit Payments

Estimated future benefit payments


	Pension plans								US Post-employment
	UK				US				benefits				Total
	2017 $m		2016 $m		2017 $m		2016 $m		2017 $m		2016 $m		2017 $m		2016 $m
Within one year		—		—		14		14		1		1		15		15
Between one and five years		3		2		53		54		6		5		61		61
After five years		17		13		62		63		7		7		82		83
		20		15		129		131		14		13		158		159

Average duration of obligation (years)		20.5		21.0		10.3		10.3		10.4		10.2