Reebok 2015 Annual Report Download - page 223

219
4
CONSOLIDATED FINANCIAL STATEMENTS
Notes – Notes to the Consolidated Statement of Financial Position
SENSITIVITYANALYSIS OF THE OBLIGATION FROM DEFINED BENEFIT PENSION PLANS
€ in millions Dec. 31, 2015 Dec. 31, 2014
Germany UK South Korea Germany UK South Korea
Present value of the obligation from
defined benefit pension plans 302 56 14 305 54 12
Increase in the discount rate
by 0.5% 277 49 14 279 47 12
Reduction in the discount rate
by 0.5% 330 65 15 335 63 13
Average duration of the obligations
(in years) 18 28 8 18 30 8
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.
FAIR VALUE OF PLAN ASSETS
€ in millions 2015 2014
Fair value of plan assets at January 1 157 83
Currency translation differences 4 4
Pensions paid (4) (5)
Contributions by the employer 11 68
Contributions paid by plan participants 0 0
Interest income from plan assets 4 4
Return on plan assets (not included in net interest income) 1 1
Fair value of plan assets at December 31 173 157
Approximately 92% (2014: 92%) of the total plan assets are allocated to plan assets in the UK (2015: 30%,
2014: 26%), Germany (2015: 56%, 2014: 59%) and South Korea (2015: 6%, 2014: 6%).
Part of the plan assets in Germany is held by a trustee under a Contractual Trust Arrangement (CTA) 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.
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 plan assets in the registered association
are mainly invested in equity index funds, hybrid bonds, fixed and variable interest rate bonds and money
market funds. Another part of the plan assets in Germany is invested in insurance contracts via pension
funds or provident funds. For this portion, an insurance company is responsible for the determination and
the implementation of the investment strategy.
In the UK, the plan assets are held under trust within the pension fund. In 2015, an additional employer
contribution in an amount of € 7 million was paid into the pension fund in order to increase the funding
ratio. 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.
The expected payments for the 2016 financial year amount to € 13 million. Thereof, € 7 million relates
to benefits directly paid to pensioners by the Group companies and € 5 million to employer contributions
paid into the plan assets. In 2015, the actual return on plan assets was € 5 million (2014: € 6 million).