4.4 Legal risk - Scor

DEFINED BENEFIT PLANS
An employer’s obligation under a defined benefit plan is to provide the agreed amount of benefits to current and future
beneficiaries. If the defined benefit plans is not wholly funded, provisions are recognized.
The discounted obligation is calculated based on the projected unit credit method by taking into consideration actuarial
assumptions, salary increase, retirement age, mortality, turnover and discount rates. Assumptions defined are based on the
macroeconomic environment of each country in which the Group operates.
Modifications to actuarial assumptions or differences between these assumptions and actual amounts give rise to actuarial
differences which are recorded in Other Comprehensive Income during the period in which they occur, in accordance with
Group accounting principles.
(a) Pension plans
The main defined benefit pension plans relate mainly to Switzerland, North America and France. These locations represent
44%, 20% and 17%, respectively, as at 31 December 2012, (47%, 19% and 16%, respectively, at 31 December 2011), of
the Group’s obligation under defined benefit plans.
These plans are mostly pre-financed via payments to external organizations which are separate legal entities.
(b) Actuarial assumptions
Actuarial assumptions used for the year end evaluations are as follows:
Assumptions as at 31 December 2012
US Canada Switzerland UK Euro zone
Expected return on assets as at 1 January 2012 7.50% 3.00% 2.90% 5.60% 3.40%
Discount rate 4.14% 4.30% 2.10% 5.30% 3.24%
Salary increase - - 2.00% 3.50% 2.50%
Assumptions as at 31 December 2011
Expected return on assets at 1 January 2011 7.50% 3.00% 4.00% 7.00% 5.00%
Expected return on assets at 31 December 2011 7.50% 3.00% 2.90% 5.60% 3.40%
Discount rate 4.87% 5.11% 2.50% 5.50% 4.25%
Salary increase - - 2.00% 3.80% 2.50%
Assumptions as at 31 December 2010
Expected return on assets at 1 January 2010 7.50% 3.00% 4.00% 7.00% 4.50%
Expected return on assets at 31 December 2010 7.50% 3.00% 4.00% 7.00% 5.00%
Discount rate 5.35% 5.38% 2.75% 5.20% 4.00%
Salary increase - - 2.00% 4.00% 2.50%
Discount rates are defined with reference to high quality long-term corporate bonds with duration in line with the duration of
the obligations evaluated. Management consider ‘AAA’, “AA” and “A” rated bonds to be high quality.
In Switzerland the discount rates are determined by reference to high quality government bonds due to the absence of a
deep market in high quality corporate bonds.
Expected returns on assets are determined plan by plan. They depend on the asset allocation and expected performance
prevailing on that date applicable to the period over which the obligation is to be settled. These are reflected in the
assumptions above.
An increase in the discount rate of 0.25% would result in a decrease in the estimated pension liability of EUR 9 million
(2011: EUR 8 million) with the offsetting impact recorded in other comprehensive income.
A decrease in the discount rate of 0.25% would result in an increase in the estimated pension liability of EUR 10 million
(2011: 6 million) with the offsetting impact recorded in other comprehensive income.
251