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 |
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| 510.1 | 507.7 | |
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| 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 |
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| Continuing operations | 8,395 | 5,685 | 4,226 | 18,306 |
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| 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 |
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| Continuing operations | 8,287 | 4,881 | 4,215 | 17,383 |
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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) |
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| 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 |
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| 9.7 | 6.1 | |
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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).
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| 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% |
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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%.
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