BMW 2015 Annual Report Download - page 136

136
The decrease in defined benefit obligations results
mainly from the change in the discount rate used for
the actuarial computation in Germany, the UK and
the
USA.
The provision for pension-like obligations for post-em-
ployment medical care in the USA and South Africa
amounts to € 52 million (2014: € 57 million) and is deter-
mined on a similar basis to the measurement of pension
obligations in accordance with IAS 19. Increased costs
do not have a direct impact on medical care obligations
relating to pensioners in the USA. In the case of South
Africa, however, it was assumed that costs would in-
crease in the long term by 8.4 % (2014: 8.3 %) p. a. The
expense recognised for obligations relating to post-em-
ployment
medical care amounted to € 10 million (2014:
€ 8 million).
Numerous defined benefit plans are in place
through-
out the BMW Group, the most significant of which are
described below.
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 re-
muneration components and the social security contri-
butions 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 mini-
mum 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 bene-
fit plans have been closed to new entrants. With effect
from 1 January 2014, new employees receive a defined
contribution entitlement with a minimum rate of return.
The assets of the German pension plans are adminis-
tered by BMW Trust e. V. , Munich, (German registered
association) in accordance with a CTA. The repre-
sentative
bodies of this entity are the Board of Directors
and the Members’ General Meeting. BMW Trust e. V.,
Munich, currently has seven members and three Board
of Directors members elected by the Members’ General
Meeting. The Board of Directors is responsible for in-
vestments, 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 association’s annual report, ratifying the activities of
the Board of Directors and adopting changes to the as-
sociation’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 require-
ments. Benefits paid in conjunction with these plans
comprise old-age retirement pensions as well as inva-
lidity
and surviving dependants’ benefits. These de-
fined benefit plans have been closed to new entrants,
who, since 1 January 2014, are covered by a defined
contribution plan.
The pension plans are administered by BMW Pension
Trustees Limited, Hams Hall, and BMW (UK) Trustees
Limited, Hams Hall, both trustee companies which act
independently of the BMW Group. BMW (UK) Trustees
Limited, Hams Hall, is represented by 14 trustees and
BMW Pension Trustees Limited, Hams Hall, by five
trustees. A minimum of one third of the trustees must
be elected by plan participants. The trustees represent
the interests of plan participants and decide on invest-
ment
strategies. Recovery contributions to the funds
are determined in agreement with the BMW Group.
USA
The BMW Group’s defined benefit plans in the USA are
primarily employer-funded and include final salary
pension plans and a post-retirement medical care plan.
Benefits paid in conjunction with these plans comprise
old-age retirement pensions, early retirement benefits,
90 GROUP FINANCIAL STATEMENTS
90 Income Statements
90 Statement of
Comprehensive Income
92 Balance Sheets
94 Cash Flow Statements
96 Group Statement of Changes in
Equity
98 Notes
98 Accounting Principles and
Policies
113 Notes to the Income Statement
121 Notes to the Statement
of Comprehensive Income
122
Notes to the Balance Sheet
147 Other Disclosures
163 Segment Information