Porsche 2006 Annual Report Download - page 161

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159
(27) Provisions for pensions and similar obligations
Employees of the entities included in the consolidated financial statements are entitled to benefits
under the company pension plan. The benefits vary according to local legal, economic and tax
conditions and are usually based on the employee service period and the beneficiary’s salary.
The direct and indirect obligations comprise current pensions and vested benefits for future benefits
and retirement benefits.
The company pension plan of the Group essentially relates to defined benefit plans, but there are
also some defined contribution plans. The defined contribution plans principally concern German
entities that are required by law to transfer contributions to the national pension insurance company.
Contributions of T€ 55,532 were paid to the national pension insurance company in Germany
(previous year: T€ 49,974). The defined benefit plans are calculated using the projected unit credit
method in accordance with IAS 19. Pension obligations are recognized at the net present value
of the pension obligations measured on the valuation date after considering any likely increases
in wages and salaries. The obligation for employees still in active service rises annually by the
amount of the interest component and the new pension obligations earned in the fiscal year
(current service cost).
The majority of the benefits pertain to Porsche AG. In addition, personal retirement capital is
accumulated in Germany by employee contributions to Porsche VarioRente.
The benefit obligations are calculated using actuarial methods. These include assumptions
concerning future wage and salary trends and pension increases. These parameters are estimated
annually by the Company.
Measurement is based on the following assumptions:
Germany Great Britain USA
2006/07 2005/06 2006/07 2005/06 2006/07 2005/06
Discount rate 5.25 % 4.50 % 5.70 % 5.35 % 6.00 % 6.00 %
Expected return
on plan assets – – 5.47 % 7.19 % 6.00 % 6.00 %
Increase in salaries 3.00 % 3.00 % 4.00 % 4.00 % 4.00 % 4.00 %
Healthcare cost
increase rate ––––5.00 % 5.00 %
Career progression 0.50 % 0.50 % ––––
Increase in pensions 2.00 % 1.75 % 3.00 % 3.00 % 3.00 % 3.00 %