Merck 2008 Annual Report Download - page 122

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The present value of commitments for future health care expenses of retirees in the
United States is based on an expected future increase in health care costs of 6.8%.
If the rate of increase is one percentage point higher or lower, the measurement of the
present value of the commitment would be either € 0.7 million higher or € 0.6 million
lower. The expenses recognized in 2008 would have been € 0.1 million higher or lower.
The actual loss on plan assets amounted to € 70.6 million (2007: return of
€ 18.2 million). Apart from the interest component stemming from provisions for
pension obligations, which is disclosed in the financial result, the relevant expense
of defined benefit and defined contribution plans is distributed across the individual
functional areas.
During 2008, the present value of all defined obligations changed as follows:
€ million 2008 2007
Present value of all defined benefit obligations on January 1 1,665.9 1,607.2
Currency translation differences –34.7 –28.9
Current service cost 58.4 61.6
Interest cost on pension obligations 82.8 77.6
Other effects recognized in income –7.9 –4.1
Actuarial gains/losses –123.5 –115.3
Pension payments in the reporting period –82.0 –84.7
Transfers/Changes in companies consolidated/Other changes 26.9 152.5
Present value of all defined benefit obligations on December 31 1,585.9 1,665.9
The fair value of the plan assets changed as follows in the reporting period:
€ million 2008 2007
Fair value of the plan assets on January 1 520.5 346.2
Currency translation differences –25.5 –22.3
Expected return on plan assets 27.1 26.0
Other effects recognized in income –4.6 –
Actuarial losses/gains –97.6 –7.2
Employer contributions 44.4 50.1
Employee contributions 9.8 8.5
Pension payments in the reporting period –24.8 –32.0
Transfers/Changes in companies consolidated/Other changes 13.3 151.1
Fair value of the plan assets on December 31 462.6 520.5
72 Income Statement
73 Balance Sheet
74 Segment Reporting
CONSOLIDATED FINANCIAL STATEMENTS OF THE MERCK GROUP
76 Cash Flow Statement
77 Free Cash Flow
77 Statement of Recognized
Income and Expense
78 Statement of Changes
in Net Equity including
Minority Interest
79 Notes
117