talanx group annual report 2011 en

Nature of risks Notes on the balance
Notes on the balance
Notes on the
sheet – assets
sheet – liabilities
statement of income
Other information List of shareholdings
(22) Provision for pensions and other post-employment
benefit obligations
The Group companies normally award their employees pension commitments based on defined
contribution or defined benefit plans. The type of pension commitment is given in accordance with
the relevant pension plan and encompasses retirement, disability, widows’ and orphans’ benefits.
The pension entitlement is dependent on length of service and salary. In terms of amounts paid, the
majority of commitments are based on defined benefit pension plans.
Under defined benefit plans the pension beneficiary is promised a specific benefit; in contrast to
defined contribution plans, the expenditures to be incurred by the company on the basis of the
benefit commitments are not fixed from the outset. The commitments to employees in Germany
predominantly comprise commitments funded directly by the company as well as those established
via HDI Unterstützungskasse e. V. Due pension benefits make up more than half of the
projected benefit obligations.
In addition, employees have an opportunity to accumulate further old-age provision by way of deferred
compensation through membership of, inter alia, HDI-Gerling Lebensversicherung AG, neue
leben Lebensversicherung AG, HDI-Gerling Pensionskasse AG, PB Pensionsfonds AG, and also via a
reinsured provident fund. Employees of the former Gerling Group also have the option of obtaining
pension commitments through deferred compensation with Gerling Versorgungskasse VVaG. These
are usually defined contribution benefit plans for which pension provisions are not recognised.
Provisions for pensions are established in accordance with IAS 19 “Employee Benefits” using the
Projected Unit Credit Method. They are established in accordance with actuarial principles and
make allowance for the length of service and estimated rate of compensation increase of pension
beneficiaries. Benefit entitlements are discounted using interest rates defined according to the
part portfolios of current or former employees and of the beneficiaries, differentiated by respective
duration. The blended rate shown below is a weighted average of the respective present values.
A new feature of the amended IAS 19 is the discontinuation of the so-called corridor method (please
see our remarks in the section “General accounting principles and application of IFRS”). Taking the
discontinuation of the corridor method into account (2011 and the preceding year), and with actuarial
gains and losses thus being recognised directly in equity, the change would have resulted in a
reduction in equity of EUR 53 (116) million after deduction of deferred taxes and deferred premium
refunds.
Talanx Group. Annual Report 2011
249