Reebok 2014 Annual Report Download - page 224

adidas Group
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2014 Annual Report
Consolidated Financial Statements
220
2014
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04.8
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Notes
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Notes to the Consolidated Statement of Financial Position
In the following table, the effects of reasonably conceivable changes in the actuarial assumptions on the present
value of the obligation from defined benefit pension plans are analysed. In addition, for Germany, UK and Japan
the average duration of the obligation is shown.
Sensitivity analysis of the obligation from defined benefit pension plans
(€ in millions) Dec. 31, 2014 Dec. 31, 2013
Germany UK Japan Germany UK Japan
Present value of the obligation from defined
benefit pension plans 305 54 15 224 41 14
Increase in the discount rate by 0.5% 279 47 14 207 35 13
Reduction in the discount rate by 0.5% 335 63 16 243 47 15
Average duration of the obligations (in years) 18 30 12 16 30 12
Since many pension plans are closed to future accrual or are not dependent on the salary, the salary trend plays a
minor role in determining pension obligations. Due to the fact that about half of the benefits of the German pension
plans are paid as lump sums or instalment payments, the pension increase rate and the mortality assumption
have significantly less impact than the discount rate when calculating the pension obligations. In Germany, the
pension increase rate was reduced to 1.5% as at December 31, 2014 (2013: 2%). This resulted in a decrease in the
present value of the pension obligations by € 10 million as at December 31, 2014.
Fair value of plan assets
(€ in millions) 2014 2013
Fair value of plan assets at January 1 83 76
Currency translation differences 4 (2)
Pensions paid (5) (2)
Contributions by the employer 68 5
Contributions paid by plan participants 0 0
Interest income from plan assets 4 3
Return on plan assets (not included in net interest income) 1 3
Plan settlements 0 0
Fair value of plan assets at December 31 157 83
Approximately 90% (2013: 83%) of the total plan assets are allocated to plan assets in the UK (2014: 26%, 2013:
44%), Germany (2014: 59%, 2013: 30%) and Switzerland (2014: 4%, 2013: 9%).
The adidas Group has set up a Contractual Trust Arrangement (CTA) in Germany for the purpose of funding
the pension obligations of adidas AG and insolvency insurance with regard to part of the pension obligations
of adidas AG. The trustee is the registered association ‘adidas Pension Trust e.V.’, which was established in
December 2013. The investment committee of the adidas Pension Trust determines the investment strategy with
the goal to match the pension liabilities as far as possible and to generate a sustainable return. In August 2014, an
amount of € 65 million in cash was transferred to the trustee. The cash has been invested in equity index funds,
hybrid bonds, fixed interest rate bonds and money market funds. adidas AG does not intend to further fund the
CTA in the 2015 financial year. Another part of the plan assets in Germany is invested in insurance contracts via
pension funds or provident funds.
In the UK, the plan assets are held under trust within the pension fund. The plan assets in Switzerland are
held by a pension foundation. The investment strategy is aligned with the structure of the pension obligations in
these countries. In the rest of the world, the plan assets consist predominantly of insurance contracts.