Audi 2015 Annual Report Download - page 257

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE BALANCE SHEET
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30.6 / FAIR VALUE OF PLAN ASSETS
EUR million 2015 2014
Plan assets as of Jan. 1 1,156 972
Interest income from plan assets 26 35
Income/expense from plan assets not recognized in interest income – 17 36
Employer contributions to the fund 133 122
Employee contributions to the fund 0 0
Pension payments from the fund –9 –9
Effects from transfers 0 0
Currency differences 1 0
Plan assets as of Dec. 31 1,291 1,156
Employer contributions to the fund totaling EUR 111 (100)
million are expected for the following fiscal year.
30.7 / COMPOSITION OF PLAN ASSETS
EUR million Dec. 31, 2015 Dec. 31, 2014
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 36 –36 43 – 43
Debt instruments 1 – 1 1 – 1
Equity funds 158 –158 317 – 317
Pension funds 965 92 1,058 664 90 753
Real estate funds 23 –23 23 – 23
Other funds 16 –16 19 – 19
Other – – – 0 – 0
Plan assets 1,199 92 1,291 1,067 90 1,156
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 securi-
ties 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 strat-
egy and implementation are monitored on an ongoing basis by
the bodies of Volkswagen Pension Trust e.V., which include
representatives from AUDI AG. Asset-liability-management
studies are also carried out at regular intervals, ensuring that
the investment 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 creat-
ed in the amount of the shortfall.
The benefit system provides for lifelong pension payments. In
order to take longevity risk into account, the most up-to-date
generation mortality reference tables “HEUBECK-RICHTTAFELN
2005 G” are used, as these have already considered the proba-
bility of greater life expectancy in the future. As an additional
measure, an annual risk monitoring is carried out by an inde-
pendent actuary 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.