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Deutsche Post World Net Annual Report 2007
Pension obligations
In a number of countries Deutsche Post World Net maintains de ned
bene t pension plans based on the pensionable compensation and length
of service of employees. Most of these bene t plans are funded through
external pension funds. Provisions for pensions are measured using the
projected unit credit method prescribed by IAS for de ned bene t
plans. In accordance with IAS ., actuarial gains and losses are rec-
ognised only to the extent that they exceed the greater of of the
present value of the obligations or of the fair value of plan assets. e
excess is allocated over the remaining working lives of active employees
and recognised in income. e interest component of pension expenses
is reported under net nance costs.
e Group also contributes to a number of de ned contribution plans.
Contributions to these de ned contribution pension plans are recog-
nised as sta costs when they are due. In employer contributions
amounting to million were paid in respect of these plans.
Pension plans for civil servant employees in Germany: In addition to
the state pension system operated by the statutory pension insurance
funds, to which contributions for hourly workers and salaried employ-
ees are remitted in the form of non-wage costs, Deutsche Post AG and
Deutsche Postbank AG pay contributions to de ned contribution plans
in accordance with statutory provisions.
Until 000, Deutsche Post AG and Deutsche Postbank AG each oper-
ated a separate pension fund for their active and former civil servant
employees. ese funds were merged with the pension fund of Deutsche
Telekom AG to form the joint special pension fund Bundes-Pensions-
Service für Post und Telekommunikation e.V. (BPSPT).
Under the provisions of the Gesetz zur Neuordnung des Postwesens
und der Telekommunikation (PTNeuOG – German posts and telecom-
munications reorganisation act), Deutsche Post AG and Deutsche
Postbank AG make bene t and assistance payments via a special pen-
sion fund to retired employees or their surviving dependants who are
entitled to bene ts on the basis of a civil service appointment. e
amount of the payment obligations of Deutsche Post AG and Deutsche
Postbank AG is governed by Section of the Postpersonalrechtsgesetz
(Deutsche Bundespost former employees act). Since , both compa-
nies have been legally obliged to pay into this special pension fund an
annual contribution of of the pensionable gross compensation of
active civil servants and the notional pensionable gross compensation
of civil servants on leave of absence. In the year under review, Deutsche
Post AG paid contributions of million (previous year: million)
and Deutsche Postbank AG paid contributions of million (previous
year: million) to Bundes-Pensions-Service für Post und Telekom-
munikation e.V.
Under the PTNeuOG, the federal government takes appropriate meas-
ures to make good the di erence between the current payment obli-
gations of the special pension fund on the one hand, and the current
contributions of Deutsche Post AG and Deutsche Postbank AG, or the
return on assets on the other, and guarantees that the special pension
fund is able at all times to meet the obligations it has assumed in respect
of its funding companies. Where the federal government makes pay-
ments to the special pension fund under the terms of this guarantee,
it cannot claim reimbursement from Deutsche Post AG and Deutsche
Postbank AG.
Pension plans for hourly workers and salaried employees: e bene t
obligations for the Group’s hourly workers and salaried employees relate
primarily to pension obligations in Germany and signi cant funded
obligations in the UK, the Netherlands, Switzerland and the USA. ere
are various commitments to individual groups of employees. e com-
mitments usually depend on length of service and nal salary. e pro-
visions for de ned bene t plans are measured using the projected unit
credit method prescribed by IAS . Future obligations are determined
using actuarial principles and actuarial assumptions. e expected ben-
e ts are built up over the entire length of service of the employees, taking
into account changes in key parameters.
e majority of the de ned bene t plans in Germany relate to Deutsche
Post AG. In the UK, signi cant liabilities were acquired as part of the
Exel plc acquisition in December 00. e de ned bene t liabilities of
Deutsche Postbank Group are almost entirely related to pension plans
in Germany. e pension liabilities of BHW Holding AG, which was ac-
quired in 00, are included as part of the Deutsche Postbank Group.
Other provisions
Other provisions are recognised for all legal or constructive obligations
to third parties existing at the balance sheet date that have arisen as
a result of past events, are expected to result in an out ow of future
economic bene ts and whose amount can be measured reliably. ey
represent uncertain obligations that are carried at the best estimate of
the expenditure required to settle the obligation. Provisions with more
than one year to maturity are discounted at market rates of interest that
re ect the risk and time until settlement of the obligation.
e unearned premiums and aggregate policy reserves for the Group’s
own insurance business included in the technical reserves (insurance) of
the Deutsche Postbank Group are calculated on the basis of the e ective
start date for each individual insurance policy. Provisions for claims
not yet processed and policy redemptions that are known at the balance
sheet date are generally determined according to the details of the indi-
vidual cases. For claims that only become known a er the balance sheet
date, a provision is recognised in the amount of the probable cost. e
provisions for the home savings group insurance policies are compared
with the level of payments made during the nancial year in respect of
claims relating to prior years. If the amount of the provision is signi -
cantly below the gures for the prior years, the resulting di erence is
re ected in an increase in the provision for claims not yet processed,
because of the particular factors a ecting this business.
For the home savings business, provisions are recognised, based on the
di erent tari s and conditions applicable to the contracts, for uncertain
liabilities relating to reimbursements of arrangement fees and for retro-
actively payable interest rate bonuses where loans have not been taken
up or there has been a change in the applicable interest rate or tari
of the contract. ese provisions are calculated as a percentage of the
total potential liability, based on the statistical data available relating to
customer behaviour and taking into account the general environment
likely to a ect the business in the future.