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  Pearson Annual Report 1998    

Notes to the Accounts


10. Employee information

  1998 1997


Staff costs    
Wages and salaries 476 454
Social security costs 54 46
Post-retirement costs 13 10

  543 510


uk us other total
Average number employed 1998        
FT Group 2,780 832 1,858 5,470
Pearson Education 764 3,171 1,489 5,424
The Penguin Group 989 1,728 601 3,318
Pearson Television 585 113 450 1,148
Other 171 48 219

Continuing operations 5,289 5,892 4,398 15,579
Discontinued operations 2,614 131 76 2,821

  7,903 6,023 4,474 18,400

Average number employed 1997        
FT Group 3,093 902 1,834 5,829
Pearson Education 818 2,498 1,279 4,595
The Penguin Group 895 1,728 582 3,205
Pearson Television 278 40 362 680
Other 124 93 217

Continuing operations 5,208 5,261 4,057 14,526
Discontinued operations 3,187 424 169 3,780

  8,395 5,685 4,226 18,306

  1998 1997


Post-retirement costs    
Defined benefit pension schemes    
UK Group plan: Regular pension cost 8 9
UK Group plan: Amortisation of surplus (9) (13)

Net pension credit (1) (4)
Other defined benefit pension schemes 6 6
Defined contribution pension schemes 5 6
Medical benefits 3 2

  13 10

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. 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 other defined benefit and defined contribution schemes, principally overseas.

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 on page 67. The principal assumptions used are also shown in the table on page 67. The net assets of the UK Group plan at 31 December 1998 are included in the pension plan accounts at £1,035m (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 pensions in payment per annum 0%
Level of funding** 122%

*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 £1m (1997: £4m).

The total market value of the assets of the non UK defined benefit schemes (mainly in the US), valued this year, was £63m (1997: £48m).

Other post-retirement benefits The Group provides certain health care and life insurance benefits principally for retired US employees and their dependants. These plans are unfunded. Retirees are eligible for participation if they meet certain age and service requirements. Plans that are available vary based upon the business division in which the retiree worked. Plan choices and retiree contributions are dependent on retirement date, business unit, option chosen, and length of service.

The principal assumptions affecting the provision for other post-retirement benefits were: medical inflation rate of 6.5% and a discount rate of 6.75%.

1998 Annual Report
* Introduction
* Chairman's statement
* Chief Executive's review
* Financial Review
* Financial Policy
* Report of the directors
* Personnel committee report
* Auditors' report
* 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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