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Provisions for pensions and similar obligations
Under the company retirement plan, employees of the consolidated companies are entitled
to benefits from defined benefit plans and defined contribution plans.
In the case of defined contribution plans, the company contributes to publicly or privately
administered pension plans on a statutory, contractual, or voluntary basis. Once the contributions
have been paid, the company has no further payment obligations.
Defined benefit pension plans generally cover commitments for old age, disability, and
widows’ and orphans’ pensions. The Group’s payments generally depend on the length of
employment and the remuneration of the employees and are defined in various pension
arrangements. Defined benefit pension plans at Heraeus are financed both by provisions
and by funds.
Defined benefit plans are found primarily in German companies. Domestically, there are
three different overall pension commitments:
For employees who joined the company before January 1, 1988, the Pension Regulation
dated October 24, 1979 will apply. This is a pension commitment by the employer that is
not dependent on salary and is financed by the employer. The pension payment increases
by a certain percentage of pensionable earnings for each applicable year of service.
The pension claims of employees who joined the company after January 1, 1988, are
regulated in Pension Regulation I 2001 dated May 14, 2001 and are composed of an
employer-financed payment guarantee based on contributions. The pension contributions
paid within this commitment are converted into “pension modules” by means of an actuarial
calculation. These modules are then credited to an individual pension account for each
beneficiary. The level of the pension contribution depends on the pensionable earnings
of each employee.
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