talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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Nature of risks Notes on the balance<br />
sheet – assets<br />
Notes on the balance<br />
sheet – liabilities<br />
Notes on the<br />
statem<strong>en</strong>t of income<br />
Other information List of shareholdings<br />
Other provisions<br />
This item includes the provisions for p<strong>en</strong>sions and other post-employm<strong>en</strong>t b<strong>en</strong>efit obligations.<br />
The Group companies normally grant their employees p<strong>en</strong>sion commitm<strong>en</strong>ts based on defined<br />
contributions or defined b<strong>en</strong>efits. The type and amount of the commitm<strong>en</strong>ts dep<strong>en</strong>d on the p<strong>en</strong>sion<br />
plans in force at the time wh<strong>en</strong> the commitm<strong>en</strong>t was giv<strong>en</strong>. They are based principally on an<br />
employee’s l<strong>en</strong>gth of service and salary level. In addition to these p<strong>en</strong>sion plans, executive staff and<br />
Board members, in particular, <strong>en</strong>joy individual commitm<strong>en</strong>ts as well as commitm<strong>en</strong>ts giv<strong>en</strong> under<br />
the b<strong>en</strong>efits plan of the Bochumer Verband.<br />
In addition, various German companies have, for quite some time now, offered the opportunity<br />
to obtain p<strong>en</strong>sion commitm<strong>en</strong>ts through deferred comp<strong>en</strong>sation. The employee-funded commitm<strong>en</strong>ts<br />
included in the provisions for accrued p<strong>en</strong>sion rights are protected by insurance contracts<br />
with various insurance companies within the Group. Furthermore, Group employees have the<br />
opportunity to make additional provision for retirem<strong>en</strong>t through direct life insurance policies, variously<br />
structured p<strong>en</strong>sion funds, or the paym<strong>en</strong>t of deferred comp<strong>en</strong>sation to provid<strong>en</strong>t funds run<br />
by insurance companies. Additional similar obligations based upon l<strong>en</strong>gth of service exist at some<br />
Group companies.<br />
In the case of p<strong>en</strong>sion commitm<strong>en</strong>ts based on defined contributions, the companies pay a fixed<br />
amount to an external p<strong>en</strong>sion fund. The commitm<strong>en</strong>t giv<strong>en</strong> by the company is fully discharged<br />
upon paym<strong>en</strong>t of the contribution. In the case of p<strong>en</strong>sion commitm<strong>en</strong>ts based on defined b<strong>en</strong>efits,<br />
the employee receives a specific p<strong>en</strong>sion commitm<strong>en</strong>t from the company or a p<strong>en</strong>sion fund. The<br />
contributions payable by the company to fund the commitm<strong>en</strong>t are not fixed in advance.<br />
If the p<strong>en</strong>sion commitm<strong>en</strong>ts are balanced against assets of a legally indep<strong>en</strong>d<strong>en</strong>t <strong>en</strong>tity (e.g. a fund)<br />
that may be used solely to cover the p<strong>en</strong>sion assurances giv<strong>en</strong> and cannot be seized by any creditors,<br />
the p<strong>en</strong>sion commitm<strong>en</strong>ts are to be recognised less the assets.<br />
P<strong>en</strong>sion commitm<strong>en</strong>ts under defined b<strong>en</strong>efit plans are measured in accordance with IAS 19 “Employee<br />
B<strong>en</strong>efits” using the projected unit credit method. Not only are the b<strong>en</strong>efit <strong>en</strong>titlem<strong>en</strong>ts and<br />
curr<strong>en</strong>t annuities existing as at the balance sheet date measured, but allowance is also made for<br />
their future developm<strong>en</strong>t. The interest rate used for discounting the p<strong>en</strong>sion commitm<strong>en</strong>ts is based<br />
upon the rates applicable to first-rate fixed-income corporate bonds in accordance with the curr<strong>en</strong>cy<br />
and duration of the p<strong>en</strong>sion commitm<strong>en</strong>ts. The amounts payable under defined contribution<br />
plans are exp<strong>en</strong>sed wh<strong>en</strong> they become due.<br />
Actuarial gains or losses from p<strong>en</strong>sion commitm<strong>en</strong>ts and plan assets derive from diverg<strong>en</strong>ces<br />
betwe<strong>en</strong> the estimated risk experi<strong>en</strong>ce and the actual risk experi<strong>en</strong>ce (irregularities in the risk<br />
experi<strong>en</strong>ce, effects of changes in the calculation parameters and unexpected gains or losses on plan<br />
assets). The Group uses the “corridor method” defined in IAS 19 to recognise its actuarial gains and<br />
losses. Under the corridor method, a portion of the actuarial gains and losses is recognised in profit<br />
or loss to the ext<strong>en</strong>t that the hitherto unrecognised actuarial gains or losses at the beginning of the<br />
financial year exceed the higher of the following amounts: 10% of the pres<strong>en</strong>t value of the earned<br />
p<strong>en</strong>sion <strong>en</strong>titlem<strong>en</strong>ts or 10% of the fair value of any plan assets. The amount outside the corridor<br />
– divided by the expected average remaining working lives of the b<strong>en</strong>eficiaries – is included as<br />
income or exp<strong>en</strong>se in the statem<strong>en</strong>t of income.<br />
Talanx Group. Annual Report <strong>2011</strong><br />
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