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CONSOLIDATED FINANCIAL REPORT | EXPLANATORY NOTES
230
is the discount rate, identified by reference to market yields of AA corporate bonds denominated in GB
pounds.
France
There were five pension plans in operation in France at 31 December 2015, of which four retirement benefit
plans that are unfunded in accordance with French legislation, and one funded plan.
All the generally set the retirement age at 63. All the plans are open to new members, except for the funded
plan which does not admit new members or accrue new liabilities. As at 31 December 2015, the plans had
an average duration of approximately 10.5 years (10.9 years at 31 December 2014).
Total plan membership is made up as follows:
In the case of the unfunded plans, the company pays the amount accrued when employees leave the
company.
The principal risk for the Prysmian Group in France is salary growth, which affects the benefits that the
company has to pay the employee. The benefits vest only upon attaining retirement age; consequently, the
cost to the company will depend on the probability that an employee does not leave the company before that
date. There are no life expectancy risks relating to these plans. The liabilities and service costs are sensitive
to the following variables: inflation, salary growth, life expectancy of plan participants and the discount rate,
identified by reference to market yields of AA corporate bonds denominated in Euro.
The main risks for the funded plan are connected to inflation and life expectancy, both of which affect
contribution levels. The plan's assets are entirely invested in insurance funds, whose main risk is that a
mismatch between the expected return and the actual return on plan assets would require contribution levels
to be revised.