Mercedes 2006 Annual Report Download - page 202

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Assumptions. The measurement date for the Group’s pension
obligations and plan assets is generally December 31. The
measurement date for the Group’s net periodic pension cost is
principally January 1. Assumed discount rates and rates of
increase in compensation used in calculating the projected benefit
obligations together with long-term rates of return on plan
assets vary according to the economic conditions of the country
in which the pension plans are situated.
The following weighted average assumptions were used to
determine benefit obligations:
The following weighted average assumptions were used to
determine net periodic pension cost:
Expected return on plan assets. The expected rate of return
for German and non-German plan assets is primarily derived from
the asset allocation of pension funds and expected future
returns for the various asset classes in portfolios. The investment
committees survey banks and large asset portfolio managers
about their expectations of future returns for the relevant market
indices. The allocation-weighted average return expectations
serves an initial indicator for the expected rate of return on
plan assets for each pension fund.
In addition, DaimlerChrysler considers long-term actual portfolio
results and historical market returns in evaluation in order to
reflect the long-term character of the expected rate. For 2007,
the expected return on plan assets will remain unchanged
for all plans.
(in %)
4.5
2.5
4.0
3.0
4.8
3.0
5.7
4.1
5.4
4.4
5.8
4.5
Non-German plans
200420052006
German plans
200420052006
Average assumptions:
Discount rate
Rate of long-term compensation increase
(in %)
4.0
7.5
3.0
4.8
7.5
3.0
5.3
7.5
3.0
5.4
8.5
4.4
5.8
8.5
4.5
6.2
8.5
4.5
Non-German plans
200420052006
German plans
200420052006
Average assumptions:
Discount rate
Expected return on plan assets (at beginning of year)
Rate of long-term compensation increase