ING Direct 2011 Annual Report Download - page 157

Notes to the consolidated annual accounts of ING Group continued
Weighted averages of basic actuarial assumptions in annual % as at 31 December
Pension benefits
Post-employment benefits
other than pensions
2011 2010 2011 2010
Discount rates 5.30 5.40 4.70 4.70
Mortality rates 1.00 1.00 1.00 1.00
Expected rates of salary increases
(excluding promotion increases) 2.20 2.70 2.70 2.70
Medical cost trend rates 6.10 6.10
Indexation 1.80 1.80 2.00 2.00
The assumptions above are weighted by defined benefit obligations. The rates used for salary developments, interest discount factors
and other adjustments reflect country-specific conditions.
The presented discount rate is the weighted average of the discount rates that are applied in different countries. These rates are based
on AA corporate bond yields of the specific countries with durations matching the pension liabilities.
An increase of 1% in the assumed medical cost trend rate for each future year would have resulted in an additional accumulated defined
benefit obligation of EUR 5 million as at 31 December 2011 (2010: EUR 5 million) and EUR 1 million increase in the charge for the year
(2010: EUR 1 million). A decrease of 1% in the medical cost trend rate for each future year would have resulted in lower defined benefit
obligation of EUR 5 million as at 31 December 2011 (2010: EUR 5 million) and EUR 2 million decrease in the charge for the year
(2010: EUR 2 million).
The actuarial assumption for Indexation for inflation decreased to 1.8% in 2010 mainly as a result of a revised best estimate assumption
for future indexation in the pension plan in the Netherlands. As a result of the uncertain circumstances the probability of granting
indexation in the short-term future decreased. In 2011, this assumption remained at 1.8% reflecting the uncertainty of granting
indexation in the short-term future.
Expected cash flows
For 2012 the expected contributions to pension plans are EUR 575 million.
The following benefit payments, which reflect expected future service as appropriate, are expected to be made by the plan:
Benefit payments
Pension
benefits
Post-
employment
benefits other
than pensions
2012 577 15
2013 549 15
2014 534 15
2015 567 14
2016 554 14
Years 2017 – 2021 3,511 45
1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
155ING Group Annual Report 2011