Audi 2006 Annual Report Download - page 194
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1 9 2
2 9 Defined benefit liabilities
Defined benefit liabilities are created on the basis of plans to provide retirement, invalidity
and surviving dependents’ benefits. The benefit amounts generally depend on the length of
service and the remuneration of the employees.
Within the Audi Group, a distinction is made between benefit systems based on provi-
sions and those financed externally via pension funds.
Obligations for retirement benefits both within Germany and in other countries are
measured according to the Projected Unit Credit Method pursuant to IAS 19. Here, the future
obligations are measured on the basis of benefit claims vested pro rata at the balance sheet
date. For purposes of measurement, trend assumptions are used for the relevant quantities
which affect the level of benefit.
The pension fund model introduced in Germany on January 1, 2001 is based on contribu-
tion-based retirement benefit commitments, which are classified as defined benefit plans
pursuant to IAS 19 (Employee Benefits). The remuneration-based annual cost of providing
employee benefits is invested in funds on a fiduciary basis by Volkswagen Pension Trust e.V.
This model offers AUDI AG employees the opportunity to increase their pension claims,
while providing full risk cover. As the units administrated on a fiduciary basis satisfy the
requirements of IAS 19 as plan assets, these funds were offset against the retirement bene-
fit obligations.
The calculation is based on the following individual actuarial assumptions:
% Dec. 31, 2006 Dec. 31, 2005
Remuneration trend 1.50–3.50 2.25–3.50
Retirement benefit trend 1.00 1.50
Interest rate 2.00–4.50 2.00–4.25
Fluctuation rate 2.00 1.40
Expected return on plan assets 5.00 5.00
The biometric mortality was determined using the “2005 G Reference Tables” by Dr. K.
Heubeck.
Progression from the present value of defined benefit obligations to the defined benefit
liabilities for meeting retirement benefit commitments recognised in the balance sheet:
EUR million Dec. 31, 2006 Dec. 31, 2005
Present value of funded defined benefit obligations 306 238
Fair value of plan assets – 306 – 238
Deficit – –
Present value of unfunded defined benefit obligations 1,974 2,180
Defined benefit liabilities recognised in the balance sheet 1,974 2,180