CONSOLIDATED FINANCIAL STATEMENTS >
EXPLANATORY NOTES
198
| 2013 ANNUAL REPORT | PRYSMIAN GROUP
Number of participants
Active
1,023
Deferred
1,118
Pensioners
1,644
Total membership
3,785
Draka pension fund
Prysmian pension fund
Total
Number of participants Number of participants Number of participants
Active
-
-
-
Deferred
583
630
1,213
Pensioners
395
312
707
Total membership
978
942
1,920
The German plans do not have assets that fund the liabilities;
the Prysmian Group pays these benefits directly.
During the next year the benefits to be paid will amount to
Euro 6 million.
The increase in benefits, and so in the recorded liability and
in service costs, will mainly depend on inflation, wage 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.
PENSION PLANS
Pension plans relate to defined benefit pension schemes that
can be “Funded” and “Unfunded”.
Liabilities for “Funded pension plans” arise from contributions
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 established in individual countries.
Liabilities for “Unfunded pension plans” relate to employer
contributions and are generally calculated according to length of
service of employees in the company and the remuneration paid
in the period preceding cessation of employment. These plans
have no assets to cover the liabilities.
At 31 December 2013, the most significant plans in terms of
accrued employee benefit liabilities are the pension plans
managed in the following countries:
• Germany
• Great Britain
• The Netherlands
Pension plans in the above countries account for approximately
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 are mostly final salary plans in which the retirement age is generally set at 65.
Although the plans are closed to new members, additional costs may need to be recognised in the future. As at 31 December 2013, the
plans had an average duration of 14.8 years.
Total plan membership is made up as follows:
Great Britain
Two defined benefit plans were in operation during 2013: 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 do
not foresee any new members or future costs after 31 December 2013; this is the result of the Draka pension fund’s recent
conversion to a defined contribution plan, as described earlier.
As at 31 December 2013, the average duration of the Draka pension fund was approximately 21 years, while that of the Prysmian
pension fund was 22.6 years.
Total plan membership is made up as follows:
