14MB - Pirelli

The principal features of the pension plans in existence at December 31, 2008 are as follows:
—— Germany - Tyre sector: this is an unfunded defined benefit plan based on the most recent
remuneration. It guarantees another pension besides the government pension. The plan was
closed in October 1982; consequently, the participants in the plan are employees who were
hired prior to that date;
—— USA – Tyre sector: this is a funded defined benefit plan based on the most recent remuneration.
It guarantees another pension besides the government pension. The plan is under the
administration of a trust. The plan was closed in 2001 and frozen in 2003 for those employees
who changed over to a defined contribution scheme. None of the current participants in the
plan are in service;
—— UK: these are funded defined benefit plans based on the most recent remuneration. They
guarantee another pension besides the government pension. The plans are under the administration
of a trust. The plans were closed in 2001; consequently, the participants in the plan
are employees who were hired prior to that date.
The movements during the year in the present value of the liabilities for pension funds (funded
and unfunded) are as follows:
(in thousands of euros)
12/31/2008 12/31/2007
Beginning balance 1,113,853 1,193,755
Exchange differences (207,553) (99,276)
Change in the scope of consolidation 3,986 -
Movements through the income statement:
- current service cost 4,669 5,110
- interest cost 57,672 58,488
Actuarial (gains) losses recognized in equity (111,992) 7,230
Employee contribution 1,323 1,620
Benefits paid (48,146) (53,760)
Other 3,745 686
Closing balance 817,557 1,113,853
The changes during the year in the fair value of the pension plan assets are as follows:
(in thousands of euros)
12/31/2008 12/31/2007
Beginning balance (907,569) (937,597)
Exchange differences 187,355 85,947
Movements through the income statement:
- expected return of plan assets (64,529) (67,042)
Actuarial (gains) losses recognized in equity 195,456 (3,030)
Employer contribution (22,453) (31,288)
Employee contribution (1,323) (1,620)
Benefits paid 40,978 47,004
Other 648 57
Closing balance (571,437) (907,569)
The assumptions made to compute the expected return of the pension fund assets are based
on the expected returns of the underlying assets (shares, bonds and deposits). The expected
return originates from the general average of the expected returns by the assets for every
class of separately identified investments, with reference to an effective or objective composition
of the assets.
ANNUAL FINANCIAL REPORT 2008
379