BMW 2013 Annual Report Download - page 135

135 GROUP FINANCIAL STATEMENTS
The decrease in defined benefit obligations results mainly
from the change in the discount rate used for the actu-
arial calculations in Germany and the USA. In the UK,
the positive impact arising from using a higher discount
rate was more than offset by the negative impact of
higher expected inflation levels. The maximum future
economic benefits relating to the asset ceiling will be
available in the form of reimbursements.
The provision for pension-like obligations for post-em-
ployment medical care in the USA and South Africa
amounts to € 45 million ( 2012* : € 113 million) and is
determined on a similar basis to the measurement of
pension obligations in accordance with IAS 19. The
medical care plan for pensioners in the USA was
amended in 2013. Instead of taking over costs, the US
entities will in future pay a subsidy, which the plan par-
ticipants can use to acquire supplementary insurance
coverage from external providers. As a consequence,
cost increases no longer have a direct impact on the ob-
ligation. In the case of South Africa, however, it was
assumed that costs would increase in the long term by
8.1 % (2012: 7.5 %) p. a. Income arising in connection
with obligations for post-employment medical care to-
talled € 40 million in the year under report (2012*: ex-
pense of € 12 million).
Numerous defined benefit plans are in place through-
out the BMW Group, the most significant of which are
described below.
* Prior year figures have been adjusted in accordance with the revised version of
IAS 19, see note 7.
Germany
Both employer- and employee-funded benefit plans are
in place in Germany. Benefits paid in conjunction with
these plans comprise old-age retirement pensions as
well as invalidity and surviving dependants’ benefits.
The Deferred Remuneration Retirement Plan is an em-
ployee-financed defined contribution plan with a mini-
mum rate of return. The fact that the plan involves a
minimum rate of return means that it is classified as a
defined benefit plan. Employees have the option to
waive payment of certain remuneration components in
return for a future benefit. Any employer social security
contributions saved are credited in the following year
to
the individual’s benefits account. The converted remu-
neration
components and the social security contribu-
tions saved are invested on capital markets. When the
benefit falls due, it is paid on the basis of the higher of
the value of the depot account or a guaranteed minimum
amount.
Defined benefit obligations also remain in Germany, for
which benefits are determined either by multiplying
a fixed amount by the number of years of service or on
the basis of an employee’s final salary. The defined
benefit plans have been closed to new entrants. With ef-
fect from 1 January 2014, new employees receive a
de-
fined contribution entitlement with minimum rate of
return.
The assets of the German pension plans are
adminis-
tered by BMW Trust e. V. (German registered association)
in accordance with a CTA. The representative bodies
of BMW Trust e. V. are the Board of Directors and the
Members’ General Meeting. BMW Trust e. V. currently
has seven members and three Board of Directors mem-
bers elected
by the Members’ General Meeting. The
Board of Directors is responsible for BMW Trust e. V.’s
investments,
drawing up and deciding on investment
guidelines as well as monitoring compliance with those
guidelines.
The members of the association can be em-
ployees, senior executives and members of the Board of
Directors. An ordinary Members’ General Meeting takes
place once
every calendar year, and deals with a range of
matters, including
receiving and approving the associa-
tion’s annual report, ratifying the activities of the Board
of Directors and adopting changes to the association’s
statutes.
United Kingdom
In the United Kingdom, the BMW Group has defined
benefit plans, which are primarily employer-funded
combined with employee-funded components based on
the conversion of employee remuneration. These plans
are subject to statutory minimum recovery requirements.
Benefits paid in conjunction with these plans comprise
old-age retirement pensions as well as invalidity and
surviving dependants’ benefits. These defined benefit
plans have been closed to new entrants, who, with
effect from 1 January 2014, will be covered by a defined
contribution plan.
The pension plans are administered by BMW Pension
Trustees Limited and BMW (UK) Trustees Limited, both
trustee companies which act independently of the
BMW Group. BMW (UK) Trustees Limited is represented
by 14 trustees and BMW Pension Trustees Limited by