2008 Registration Document - Rexel

14. Financial information concerning the assets andliabilities, financial position and profits and lossesof Rexel18. EMPLOYEE BENEFITSThe Group provides employee benefits under variousarrangements, including defined benefit and definedcontribution plans. The specific conditions of these plans varyaccording to the rules applying in each country concerned.These plans include pensions, lump-sum payments onretirement, jubilees, early retirement benefits, and healthcare and life insurance benefits in favor of former employees,including retired employees. The most significant fundedretirement plans are in Canada, the United Kingdom, theUnited States, the Netherlands and Switzerland, and aremanaged through vehicles independent of the Group. InFrance and Italy, the obligations principally concern lumpsumpayments on retirement and long service awards(jubilees), and are usually unfunded.The change in the present value of the obligation in respectof defined benefit plans is as follows:(in millions of euros)Defined benefitobligations2008 2007At the beginning of the period 461.6 482.0Service cost 14.9 12.1Interest cost 45.2 21.8Benefit payments (43.6) (22.5)Employee contributions 3.1 3.9Actuarial (gain) loss (51.0) (29.0)Change in consolidation scope 560.0 0.4Translation differences (65.9) (1.9)Other changes (0.2) (5.2)At the end of the period 924.1 461.6The change in the fair value of the defined benefit planassets breaks down as follows:(in millions of euros)Plan assets2008 2007At the beginning of the period 353.1 343.6Employer contributions 27.7 17.1Employee contributions 3.2 3.9Return on plan assets (91.4) 15.1Benefit payments (43.7) (22.2)Change in consolidation scope 525.8 0.2Translation differences (45.0) (1.6)Other changes (1.0) (3.0)At the end of the period 728.7 353.1The reconciliation of the liability recognized on the balancesheet with the present value of the obligation in respect ofdefined benefit plans is as follows:(in millions of euros)As of December 31,2008 2007Defined benefit obligations 924.1 461.6Fair value of plan assets (728.7) (353.1)Funded status 195.4 108.5Unrecognized actuarial gains andlosses (61.9) 14.4Effect of the asset cap – 2.7Recognized net liability fordefined benefit obligations 133.5 125.6of which “Employee benefits” 175.4 125.6of which “Other financial assets” (1) (41.9) –(1) The €41.9 million surplus of the defined benefit plan assetsover liabilities is relating to the Hagemeyer post-employmentscheme in the Netherlands which is subject to minimum fundingrequirements. Pursuant to the plan, the company is entitled tocontribution holidays when the funding ratio is beyond 150%, andrefunds when the ratio is above 200% or at termination of theplan when there is a surplus. No asset ceiling was recognized atDecember 31, 2008 since the difference between the projectionsof future service costs and the expected future contributions wasin excess of the asset.PAGE 192 | REXEL 2008