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Consolidated Financial Report |
EXPLANATORY NOTES
2014 Annual Report
Prysmian Group
212
Liabilities for “Funded pension plans” are funded by con-
tributions made by the employer and, in some cases, by
employees, into a separately managed pension fund. The
fund independently manages and administers the amounts
received, investing in financial assets and paying benefits
directly to employees. The Group’s contributions to such
funds are defined according to the legal requirements esta-
blished in individual countries.
Liabilities for “Unfunded pension plans” are managed
directly by the employer who sees to providing the benefits to
employees. These plans have no assets to cover the liabilities.
At 31 December 2014, the most significant plans in terms of
accrued employee benefit liabilities are the plans managed in
the following countries:
• Germany;
• Great Britain;
• The Netherlands.
Pension plans in the above countries account for approxima-
tely 80% of the related liability. The principal risks to which
they are exposed are described below:
Germany
There are thirteen pension plans in Germany. These aremostly
final salary plans in which the retirement age is generally
set at 65. Although most plans are closed to new members,
additional costs may need to be recognised in the future. As
at 31 December 2014, the plans had an average duration of
15.7 years (14.8 years at 31 December 2013).
Total plan membership is made up as follows:
31 December 2014
31 December 2013
Number of participants Number of participants
Active
975
1,023
Deferred
1,067
1,118
Pensioners
1,724
1,644
Total membership
3,766
3,785
The German plans do not have any assets that fund the liabi-
lities; the Prysmian Group pays these benefits directly.
During the next year the benefits payable will amount to Euro
6 million (unchanged compared with 31 December 2013). The
increase in benefits, and so in the recorded liability and in
service costs, will mainly depend on inflation, salary growth
and the life expectancy of plan members. Another variable to
consider when determining the amount of the liability and of
service costs is the discount rate, identified by reference to
market yields of AA corporate bonds denominated in Euro.
Great Britain
Two defined benefit plans were in operation at 31 December
2014: the Draka pension fund and the Prysmian pension fund.
Both funds are final salary plans, in which the retirement age
is generally set at 65 for the majority of plan participants.
The plans will not admit any new members or accrue any new
liabilities after 31 December 2014.
As at 31 December 2014, the plans had an average duration
of approximately 20.3 years (approximately 20.9 years at 31
December 2013).