Mercedes 2015 Annual Report Download - page 235

242 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Defined contribution pension plans
Under defined contribution pension plans, Daimler makes
defined contributions to external insurance policies or invest-
ment funds. There are fundamentally no further contractual
obligations or risks for Daimler in excess of the defined contri-
butions. The Group also pays contributions to governmental
pension schemes. In 2015, the total cost from defined contri-
bution plans amounted to €1.5 billion (2014: €1.4 billion).
Of those payments €1.4 billion (2014: €1.3 billion) was related
to governmental pension plans.
Multi-employer plans
Daimler participates in some collectively bargained defined
benefit pension plans maintained by more than one employer.
The Group presents several of these plans in its consolidated
financial statements as defined contribution plans because the
information required to use defined benefit accounting is not
available in a timely manner or in sufficient detail. The Group
cannot exercise direct control over such plans and the plan
trustees have no legal obligation to share information directly
with participating employers. Higher contributions by the
Group to such a pension plan could be required in particular
when an underfunded status exceeds a specific level. Exit
from such a plan can lead to the companies involved having
to offset the potential future shortfall relating to their share
of the plan. Furthermore, the possibility exists that Daimler can
be liable for other participants’ obligations. Compared with
the prior-year assessment, the extent of the risk has increased,
but at December 31, 2015, the risk to the Group continues
to be classified as very low. No exit from any of these plans
is intended.
Other post-employment benefits
Certain foreign subsidiaries of Daimler, mainly in the United
States, provide their employees with post-employment health
care benefits with defined entitlements, which have to be
accounted for as defined benefit plans. These obligations are
funded to a small extent through reimbursement rights
and plan assets. Table  E.56 shows key data for other post-
employment benefits.
Significant risks in connection with commitments for other
post-employment benefits (medical care) relate to rising
healthcare costs and lower contributions to those costs from
the public sector. In addition, these plans are subject to
the usual risks for defined benefit plans, in particular the risk
of changes in discount rates.
In May 2014, Daimler Trucks North America LLC and the
United Auto Workers union (UAW) entered into an agreement
to settle a healthcare plan as part of a collective bargaining
agreement. As a result of this agreement, the obligation to the
active eligible employees was settled in the fourth quarter
of 2014. The resulting cash outflow from this transaction was
approximately €0.3 billion. The transfer of the obligation to
the retirees was subject to US court approval. The approval was
received in December 2014 and became legally binding with
expiration of the deadline for notices of appeal at the end of
January 2015. The cash outflow from this transaction (approxi-
mately €0.1 billion) occurred in the first quarter of 2015. The
settlement has no material impact on the Group’s consolidated
statement of income or on the EBIT of Daimler Trucks.
Key data for other post-employment benefits
2015 2014
In millions of euros
Present value of defined benefit obligations 1,129 1,193
Fair value of plan assets and
reimbursement rights
68
87
Funded status -1,061 -1,106
Net periodic cost for other
post-employment benefits
-21
-51
E.56