Audi 2014 Annual Report Download - page 255

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE BALANCE SHEET
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30.7 / COMPOSITION OF PLAN ASSETS
EUR million Dec. 31, 2014 Dec. 31, 2013
Market price
in an active
market
No market price
in an active
market
Total Market price
in an active
market
No market price
in an active
market
Total
Cash and cash equivalents 43 –43 51 – 51
Debt instruments 1 – 1 – – –
Real estate – – – – 0 0
Equity funds 317 –317 274 – 274
Pension funds 664 90 753 523 86 609
Real estate funds 23 –23 21 – 21
Other funds 19 –19 16 – 16
Asset-backed securities – – – 1 – 1
Other 0 – 0 – 0 0
Plan assets 1,067 90 1,156 885 86 972
As well as the general market risk, the plan assets of Volkswagen
Pension Trust e.V., Wolfsburg, are mainly exposed to interest
rate and share price risks, as they are primarily invested in
investment funds comprising fixed-income securities and
shares. To cushion the market risk, the benefit system provides
for funds to be allocated to a fluctuation reserve prior to each
surplus allocation. Additionally, the investment strategy and
implementation is monitored on an ongoing basis by the bod-
ies of Volkswagen Pension Trust e.V., which include representa-
tives from AUDI AG. Asset-liability-management studies are
also carried out at regular intervals, ensuring that the invest-
ment is compatible with the obligations in question.
The present value of the obligation is subject to interest rate
risk. Should the value of the plan assets fall below the present
value of the guaranteed obligation, provisions should be created
in the amount of the shortfall.
The benefit system provides for lifelong pension payments. In
order to take account of the risk of long life, the most up-to-date
generation mortality reference tables “HEUBECK-RICHTTAFELN
2005 G” are used, as these have already taken account of
greater life expectancy in the future. As a further measure,
annual risk monitoring is carried out by an independent actu-
ary as part of the review of the assets held by Volkswagen
Pension Trust e.V.
To reduce the inflation risk presented by the adjustment of
current pension payments in line with the rate of inflation, a
non-inflation-linked indexing of pensions has been applied to
pension obligations where legally permissible.