BMW 2011 Annual Report Download - page 122

122
76 GROUP FINANCIAL STATEMENTS
76 Income Statements
76 Statement of
Comprehensive Income
78 Balance Sheets
80 Cash Flow Statements
82 Group Statement of Changes
in Equity
84 Notes
84 Accounting Principles
and Policies
100 Notes to the Income
Statement
107 Notes to the Statement
of Comprehensive Income
108
Notes to the Balance Sheet
129 Other Disclosures
145 Segment Information
The expense from reversing the discounting of pen-
sion obligations and the income from the expected
return on plan assets are reported as part of the finan-
cial result. All other components of pension expense
are included in the income statement under costs by
function.
Depending on the risk structure of the pension obliga-
tions involved, pension plan assets are invested in various
investment classes, the most predominant one being
bonds. The asset portfolio also includes equity instru-
ments,
property and alternative investments. The ex-
pected rate of return is derived on the basis of the
specific investment strategy applied to each individual
pension fund. This is determined on the basis of the
rates of return from the individual investment classes
taking account of costs and unplanned risks. This
approach resulted in the following expected rates of re-
turn on plan assets (disclosed on the basis of weighted
averages):
Germany United Kingdom Other
in % 2011 2010 2011 2010 2011 2010
Expected rate of return on plan assets 4.75 5.30 5.30 5.40 5.35 5.51
Compared to the expected return of € 522 million (2010:
€ 468 million), fund assets actually increased in the
financial year 2011 by € 485 million (2010: increase in
fund assets of € 695 million), giving rise to actuarial
losses on fund assets of € 37 million (2010: actuarial
gains of € 227 million). Actuarial losses on obligations
amounted to € 493 million in 2011 (2010: actuarial
losses of € 459 million) and related mainly to the lower
discount rates used in the UK and the USA.
The level of the pension obligations differs depending
on the pension system applicable in each country.
Since the state pension system in the United Kingdom
only provides a low fixed amount benefit, retirement
benefits are largely organised in the form of company
pensions on the one hand and arrangements financed
by the individual on the other. The pension benefits
in the UK therefore contain contributions made by the
employee.
The net obligation from pension plans in Germany, the
UK and other countries changed as follows:
Germany
Defined benefit obligation Plan assets Net obligation
in € million 2011 2010 2011 2010 2011 2010
1 January 5,292 4,619 – 5,207 – 3,144 85 1,475
Expense from pension obligations and
expected return on plan assets 438 321 – 249 – 202 189 119
Payments to external funds – – – 32 – 1,740 – 32 – 1,740
Employee contributions 37 29 – 34 – 27 3 2
Payments on account and pension payments – 131 – 119 10 8 – 121 – 111
Actuarial gains (–) and losses (+) – 18 441 334 – 102 316 339
Translation differences and other changes – 1 – – – 1
31 December 5,618 5,292 – 5,178 – 5,207 440 85