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  Pearson Annual Report 1997    

Notes to the Accounts

   
 

9. Employee information

The details of the emoluments of the directors of Pearson plc are shown on pages 39 and 45 in the printed version of this document and form part of these audited financial statements.

  1997 1996
All figures in million    
Staff costs    
Wages and salaries 453.7 454.1
Social Security costs 46.7 47.5
Post-retirement costs 9.7 6.1



  510.1 507.7



  UK USA Other Total
Average Number employed 1997        
Information 3,093 902 1,834 5,829
Education 818 2,498 1,279 4,595
Entertainment 4,360 2,192 1,113 7,665
Other 124 93 - 217





Continuing operations 8,395 5,685 4,226 18,306





Average number employed 1996        
Information 3,078 903 1,786 5,767
Education 823 2,352 1,348 4,523
Entertainment 4,272 1,607 1,080 6,959
Other 114 19 1 134





Continuing operations 8,287 4,881 4,215 17,383





Note: In 1996 discontinued operations employed on aerage 2,564 in the United Kingdom (Information sector).

Discontinued operations total staff costs were nil (1996: 38.7m).

 

  1997 1996
All figures in million    
Post-retirement costs    
Defined benefit pension schemes    
United Kingdom Group plan: Regular pension cost 9.0 12.6
United Kingdom Group plan: Amortisation of surplus (13.3) (17.1)



Net pension credit (4.3) (4.5)
Other defined benefit pension schemes 5.8 5.0
Defined contribution pension schemes 6.3 4.4
Medical benefits 1.9 1.2



  9.7 6.1



Pension schemes The Group operates a number of pension schemes throughout the world. The major schemes are self-administered and the schemes' assets are held independently of the Group's finances. Pension costs are assessed in accordance with the advice of independent qualified actuaries. The principal schemes are primarily of the defined benefit type. There is also a closed defined benefit scheme in the UK, which now receives neither employers' nor members' contributions, and a number of non-UK defined contribution schemes.

The results of the most recent actuarial valuation, using the projected unit method of valuation, of the principal funded UK scheme, are shown in the table below. The principal assumptions used are also shown in the table below. The net assets of the UK Group plan at 31 December 1997 are included in the pension plan accounts at 952m (unaudited).

 



  UK Group Plan
Assets at market value at latest full actuarial valuation on 1 January 1996* 774m
Real return on investments per annum 4.8%
Real increase in earnings per annum 1.9%
Real increase in pension payment per annum 0%
Level of funding** 122%


Note: *Stated after a transfer of 2m to the scheme of a former subsidiary.

** Actuarial value of assets expressed as a percentage of the actuarial value of the liabilities.

In view of these results, all employers' contributions remain suspended for the time being and the valuation surplus is being apportioned, in accordance with SSAP24, over the expected remaining service lives of the current employees, resulting in a credit to the profit and loss account of 4.3m (1996: 4.5m).

Following the changes announced in the UK Budget in July 1997, whereby pension schemes are no longer able to reclaim tax credits on UKdividends, the actuaries have carried out an informal review as at 1 January 1997 to assess the impact on the principal UK scheme. The impact is not material.

The total market value of the assets of the non UK defined benefit schemes (mainly in the USA), valued this year, was 48.0m (1996: 40.3m).

Other post-retirement benefits The principal assumptions affecting the provision for other post retirement benefits were: medical inflation rates of between 5.5% and 8.0% and a discount rate of 7.25%.

1997 Annual Report
* Group summary
* Information
* Education
* Entertainment
* Investment banking
* Chairman's statement
* Chief Executive's review
* Financial Review
* Financial Policy
* Consolidated profit and loss account
* Consolidated balance sheet
* Consolidated statement of cash flows
* Statement of total recognised gains and losses
* Note of historical cost profits and losses
* Reconciliation of movements in equity shareholders' funds
* Principal subsidiaries and associates
* Five year summary
* Shareholder information
   
* Notes to the accounts
 

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