Mercedes 2003 Annual Report Download - page 155
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Please find page 155 of the 2003 Mercedes annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.The impact of the Medical Drug Act, which became law in
December 2003 and was published on January 12, 2004, was
not taken into account by DaimlerChrysler in 2003, as there
were no final guidelines on the part of the FASB in 2003 on the
treatment of the impact in the balance sheet and the statement
of earnings. On the basis of actuarial estimates, the Medical Drug
Act will result in an overall reduction of the obligations for the
postretirement health and life insurance benefits amounting to
approximately €0.7 billion.
Contributions. DaimlerChrysler did not make any contributions
to its other postretirement plans in 2003 (2002: €1 million).
DaimlerChrysler does not plan to make any contributions in 2004.
In 2003 DaimlerChrysler transferred €0.7 billion from the VEBA-
Trust to the non-German pension plan assets.
Assumptions. Assumed discount rates and rates of increase in
remuneration used in calculating the accumulated postretirement
benefit obligations together with long-term rates of return on plan
assets vary according to the economic conditions of the country in
which the plans are situated.
The average assumptions used to determine the benefit obliga-
tions of the Group’s postretirement benefit plans at December 31
were as follows (in %):
The average assumptions used to determine the net periodic
postretirement benefit cost of the Group’s postretirement benefit
plans for the years ended December 31 were as follows (in %):
U.S. postretirement benefit plan assets utilize an asset allocation
substantially similar to that of the pension assets. The expected
rate of return, therefore, is the same for both pension and postre-
tirement benefit plan asset portfolios. Accordingly, the information
about the expected rate of return on pension plan assets,
described above, also applies to postretirement plan assets.
Assumed health care cost trend rates have a significant effect on
the amounts reported for the Group’s health care plans. The follow-
ing schedule presents the effects of a one-percentage-point
change in assumed health care cost trend rates:
For 2004 the expected rate of return on plan assets is identical
with the rate applied in 2003.
Net Postretirement Benefit Cost. The components of net periodic
postretirement benefit cost for the years ended December 31,
2003, 2002 and 2001 were as follows:
200120022003
6.3
8.0
5.0
6.8
10.0
5.0
7.4
6.9
5.0
Average assumptions:
Discount rate
Health care inflation rate in following
(or “base”) year
Ultimate health care inflation rate (2008)
200120022003
6.8
8.5
10.0
5.0
7.4
10.5
6.9
5.0
7.7
10.4
7.5
5.0
Average assumptions:
Discount rate
Expected return on plan assets
(at the beginning of the year)
Health care inflation rate in following
(or “base”) year
Ultimate health care inflation rate (2008)
(in millions of €)
1-Percentage-
Point Increase
180
1,716
(153)
(1,564)
1-Percentage-
Point Decrease
Effect on total of service and interest
cost components
Effect on accumulated postretirement benefit
obligations
(in millions of €)
20012002
2003
278
983
(217)
220
24
1,288
2
1,290
262
1,062
(345)
38
76
1,093
26
1,119
257
1,033
(346)
(7)
82
1,019
154
1,173
Service cost
Interest cost
Expected return on plan assets
Amortization of:
Unrecognized net actuarial (gains) losses
Unrecognized prior service cost
Net periodic postretirement benefit cost
Settlement/curtailment loss
Net postretirement benefit cost
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