33. Pension obligations

Provisions for pension obligations are made for accrued and current benefits of both currently active and former members of staff of Nordzucker Group and of their surviving dependants.

Benefit obligations are structured in line with the legal, fiscal and economic conditions in each country.

The Group offers both defined contribution and defined benefit plans. Pension commitments are based on collective agreements and in a few cases on individual agreements with fixed benefit amounts.

The defined benefit plans have commitments both covered by provisions and funded by plan assets. As such, reinsurance was pledged to the beneficiaries for some of the benefit plans in 2005. Furthermore, the Nordzucker Group concluded an additional pension commitment with a pension fund for some of the benefit plans in 2014. As such, 80 per cent of pension obligations can now be funded in full in exchange for a single premium.

In 2012, the Nordzucker Group concluded a benefit plan for all new employees that distributes the biometric risks between the employee and the employer. The benefit plan involves changing to a capital commitment with market-based interest.

In the reporting period, the expenses for defined contribution plans amounted to EUR 6,045 thousand (previous year: EUR 6,604 thousand).

Provisions for pension benefits are determined in accordance with IAS 19 on the basis of actuarial assumptions. In the reporting and comparative period, the following weighted financial assumptions were applied:

Financial assumptions regarding pension obligations
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2013/2014
reporting period

2012/2013
comparative period

 

Domestic

Foreign

Domestic

Foreign

Discount rate

3.40 %

3.50 %

3.45 %

3.50 %

Salary increase

2.50 %

2.75 %

2.50 %

2.75 %

Pension increase

1.50 %

1.75 %

1.50 %

1.75 %

For domestic companies in the Nordzucker Group the assumptions for life expectancy are taken from the actuarial tables 2005 G by Dr Klaus Heubeck.

The following table shows the percentage effect that a change in assumptions would have on the defined benefit obligations at the reporting date, provided the other assumptions remained unchanged:

Sensitivity analysis
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2013/2014
reporting period

 

 

Domestic

Foreign

Discount rate

+0.5 %

–6.79 %

–6.35 %

 

–0.5 %

7.67 %

6.56 %

Salary increase

+0.5 %

0.53 %

1.75 %

 

–0.5 %

–0.51 %

–1.68 %

Pension increase

+0.5 %

4.52 %

6.52 %

 

–0.5 %

–4.16 %

–5.97 %

Provisions for pensions and similar obligations disclosed in the balance sheet changed as follows:

Change in pension provisions
Enlarge table XLS Download

 

Defined benefit obligation

Plan asset

Net liability

in EUR thousands

Domestic

Foreign

Total

Domestic

Foreign

Total

Total

As of 1/3/2012

141,659

34,654

176,313

36,305

0

36,305

140,008

Adjustment due to retrospective application of IAS 19 (2011)

14,866

0

14,866

0

0

0

14,866

Adjusted as of 1/3/2012

156,525

34,654

191,179

36,305

0

36,305

154,874

Service cost

2,002

279

2,281

/

/

/

2,281

Interest expense/interest income

7,435

1,487

8,922

1,724

0

1,724

7,198

Other value changes

262

2,412

2,674

0

0

0

2,674

Total recognised on the income statement

9,699

4,178

13,877

1,724

0

1,724

12,153

Return on plan assets

/

/

/

–209

0

–209

209

Actuarial gains/losses

30,329

2,699

33,028

/

/

/

33,028

Total remeasurements (not recorded in the income statement)

30,329

2,699

33,028

–209

0

–209

33,237

Payments made for reinsurance

0

0

0

1,524

0

1,524

–1,524

Reimbursements from reinsurance

0

0

0

–5,039

0

–5,039

5,039

Pension payments made

–8,948

–2,014

–10,962

0

0

0

–10,962

Adjusted as of 28/2/2013

187,605

39,517

227,122

34,305

0

34,305

192,817

Service cost

3,137

285

3,422

/

/

/

3,422

Interest expense/interest income

6,472

1,237

7,709

1,184

0

1,184

6,525

Other value changes

0

–1,485

–1,485

0

0

0

–1,485

Total recognised on the income statement

9,609

37

9,646

1,184

0

1,184

8,462

Return on plan assets

/

/

/

437

0

437

–437

Actuarial gains/losses

2,006

428

2,434

/

/

/

2,434

Total remeasurements (not recorded in the income statement)

2,006

428

2,434

437

0

437

1,997

Payments made for reinsurance

0

0

0

39,647

0

39,647

–39,647

Reimbursements from reinsurance

0

0

0

–3,557

0

–3,557

3,557

Pension payments made

–8,961

–2,063

–11,024

0

0

0

–11,024

As of 28/2/2014

190,259

37,919

228,178

72,016

0

72,016

156,162

For the 2014/2015 reporting period, contributions to plan assets are expected to amount to EUR 102 thousand (previous year: EUR 102 thousand).