Mercedes 2008 Annual Report Download - page 191

Consolidated Financial Statements |Notes to Consolidated Financial Statements |187
Alternative investments consist of private equity and debt invest-
ments as well as investments in commodities and hedge funds.
Assumptions. The measurement date for the Group’s pension
benefit obligations and plan assets is generally December 31.
The measurement date for the Group’s net periodic pension cost
is generally January 1. The assumptions used to calculate the
projected benefit obligations together with long-term rates of re-
turn 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 pension benefit obligations:
The following weighted average assumptions were used to
determine net periodic pension cost:
Discount rates. The discount rates for German and non-German
pension plans are determined annually as of December 31 on the
basis of high quality corporate bonds with maturities and values
matching those of the pension payments.
Expected return on plan assets. The expected long-term rates of
return for German and non-German plan assets are primarily
derived from the asset allocation of plan assets and expected
future returns for the various asset classes in the portfolios.
Our investment committees survey banks and large asset portfolio
managers about their expectations for future returns for the rele-
vant market indices. The allocation-weighted average return
expectations serve as an initial indicator for the expected rate
of return on plan assets for each pension fund.
In addition, Daimler considers long-term actual plan assets
results and historical market returns in its evaluation in order to
reflect the long-term character of the expected rate of return.
Non-German plans
At December 31,
2007
2008
German plans
At December 31,
20072008
5.4
3.1
1.9
5.9
3.5
1.8
5.3
4.6
–
5.0
3.3
–
Discount rates
Expected long-term remuneration increases
Expected increase in cost of living1
1 For most non-German plans, expected increases in cost of living are not a part of the benefit formula.
in %
Non-German Plans
2006
20072008
German Plans
200620072008
4.0
7.5
3.0
1.8
4.5
7.5
2.5
1.9
5.4
6.5
3.1
1.9
5.4
8.5
4.4
–
5.7
8.5
4.1
–
5.3
7. 3
4.6
–
in %
Discount rates
Expected long-term returns on plan assets
Expected long-term remuneration increases
Expected increase in cost of living1
1 For most non-German plans, expected increases in cost of living are not a part of the benefit formula.