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Both plans operate under trust law and are managed and
administered by a Board of Trustees on behalf of members and
in accordance with the terms of the Trust Deed and Rules and
current legislation. The assets that fund the liabilities are held
by the Trust, for both plans.
For the purposes of determining the level of funding, the
Trustees appoint an actuary to value the plans every three
years, with annual updates. The latest valuations of the Draka
pension fund and the Prysmian pension fund were conducted
on 25 March 2013 and on 31 December 2011 respectively.
Even the contribution levels are set every three years at the
time of performing the valuation to determine the level of plan
funding. Currently, the contribution levels are set at Euro 1.7
million a year for the Draka pension fund and Euro 0.2 million a
year for the Prysmian pension fund.
The Trustees decide on the investment strategy in agreement
with the company. The strategies differ for both plans. In
particular, the Draka pension fund has invested a higher
proportion of its assets in equities; the fund’s investment split
is as follows: 66% in equities, 27% in bonds and 7% in other
financial instruments. The Prysmian pension fund has invested
its assets as follows: 43% in equities, 56% in bonds and 1% in
other financial instruments.
The main risk for the Prysmian Group in Great Britain is that
mismatches between the expected return and the actual return
on plan assets would require contribution levels to be revised.
The liabilities and service costs are sensitive to the following
variables: inflation, wage growth, life expectancy of plan
participants and future growth in benefit levels. Another
variable to consider when determining the amount of the
liability is the discount rate, identified by reference to market
yields of AA corporate bonds denominated in GB pounds.
Number of participants
Active
402
Deferred
608
Pensioners
1,038
Total membership
2,048
The plan’s level of funding and of contributions are set
annually by an actuary, in compliance with local legislation.
The current level of contributions for the Group amounts to
Euro 1.9 million.
The pension fund is responsible for its asset investment
strategy, with 60% of its assets invested in bonds and 40%
in equities. Under the plan’s rules and local legislation, any
surplus arising from the plan cannot be reimbursed to the
employer and cannot be used in lieu of the contribution due.
Benefits are paid directly by the pension fund.
The main risk for the Prysmian Group in The Netherlands is
that mismatches between the expected return and the actual
return on plan assets that fund the obligations would require
contribution levels to be revised. If the liabilities were not
covered by the assets, the benefits might have to be reduced.
The liabilities and service costs are sensitive to the following
variables: inflation, wage growth, life expectancy of plan
participants and future growth in benefit levels. Another
variable to consider when determining the amount of the
liability is the discount rate, identified by reference to market
yields of AA corporate bonds denominated in Euro.
In addition, significant changes are expected in local legislation
regarding pension benefits. As from 1 January 2014, the
retirement age could be extended from 65 to 67, with the
contribution rate rising from 1.84% to 2.15%. As from 1 January
2015, the contribution rate is expected to decrease.
The Netherlands
In The Netherlands there is one pension fund managed by Stichting Pensioenfonds Draka Holding, in which three legal entities
participate. The rules of the plan are the same for all participating entities. The plan provides benefits according to length of
average career and at a retirement age generally set at 65.
The plan is open to new members and has a duration of 16.4 years.
Total plan membership is made up as follows:
