Note 33 – Provisions for defined benefit pensions

The Group has a couple of defined benefit pension plans, where the pension plan in the German operation is the most significant. The defined pension plans are based on employee pensionable remuneration and length of service. The plans are exposed to acturarial risks such as longevity risk, currency risk, interest rate risk and investment risk. All plans are unfunded.

The Group’s provision for defined benefit plans is related to the following countries:

2015 2014
Germany 27 896 29 170
Austria 5 626 0
Other countries 1 605 1 460
Total 35 127 30 630

The change of the provision for defined benefit pensions is specified in the table below:

2015 2014
Carrying amount at 1 January 30 630 26 188
Acquisitions 5 882 0
Pension cost charged to profit or loss
Service cost of current period 426 170
Service cost of past periods 0 16
Net interest expense 633 927
Remeasurement gains/losses in other comprehensive income
Actuarial gains/losses from changes in financial assumptions -756 5 301
Actuarial gains/losses from experience adjustments 161 -548
Other adjustments
Benefits paid -1 849 -1 424
Carrying amount at 31 December 35 127 30 630
The net present value of the defined benefit obligation in the German operation has the following participant structure:
Active members 5 957
Non-active members 1 992
Pensioners 19 947

The main actuarial assumptions to determine defined benefit obligations are specified below:

2015 2014
Discount rate:
Germany 2.3% 2.0%
Austria 2.2%
Future salary increases:
Germany 2.5% 2.0%
Austria 0.00%
Future pension increases:
Germany 1.68% 1.65%
Austria 2.00%
Life expectation for the pensioners at the age of 65:
Germany 21.00 years 20.89 years
Austria N/A

The sensitivity of the overall pension liability to changes in the most significant weighted assumptions are:

Change in assumption Impact on net pension provision
Discount rate:
Germany +/- 0.5% +/- 1 798 TEUR
Future salary increases:
Germany +/- 0.5% +/- 157 TEUR
Future pension increases:
Germany +/- 0.5% +/+ 823 TEUR
Life expectation for the pensioners at the age of 65:
Germany +/- 1 years +/- 1 279 TEUR

 

Effect on future cash flows

The Group estimate the amount to be paid 2016 in relation to unfunded defined benefit obligations in the German operation to 1 347 TEUR.