ING Direct 2013 Annual Report Download - page 186

Notes to the consolidated annual accounts of ING Group continued
Changes in defined benefit obligation and other post-employment benefits
Defined benefit obligation Other post-employment benefits
2013 2012 2013 2012
Opening balance 22,079 16,212 190 176
Current service cost 358 283 –25 5
Interest cost 781 847 215
Remeasurements: Actuarial gains and losses arising
from changes in demographic assumptions –10 2
Remeasurements: Actuarial gains and losses arising
from changes in financial assumptions 243 5,919
Participants' contributions 2
Benefits paid –591 – 617 –4
Past service cost 3–2
Effect of curtailment or settlement –138 –468 –1 –1
Exchange rate differences –56 –19 –2 –1
Changes in the composition of the group and other
changes –1,420 –80 –27
Closing balance 21,249 22,079 137 190
In 2013, Changes in the composition of the group and other changes includes EUR –1,494 million as a result of the classification of ING
U.S. as held for sale and EUR 45 million as a result of the classification to continuing operations of ING Japan. Reference is made to Note
59 ‘Other events’.
2013 – Effect of curtailment
In 2013, the Effect of curtailment or settlement includes the curtailments of two pension plans in the Netherlands. These plans are or will
be closed for new pension rights and are replaced by defined contribution schemes.
2012 - Effect of curtailment - New pension scheme for employees in the Netherlands
In 2012, ING finalised its agreement on a new pension scheme for employees in the Netherlands, following acceptance by both the unions
and their members. The new pension scheme has taken effect on 1 January 2014 and will apply to the approximately 19,000 staff
members in the Netherlands of ING Bank and WestlandUtrecht Bank as well as to the staff members in the Netherlands of NN Group.
Under the agreement, two new separate pension funds have been created, one for banking and one for NN Group. The new scheme
qualifies as a defined contribution under IFRS-EU and has replaced the existing defined benefit scheme in the Netherlands.
The key elements of the new scheme are:
• ING contributes a yearly pre-defined premium to the funds. The employee contribution to the new scheme will gradually increase to
one-third of the base pension premium;
• The minimum salary level at which pensions are provided will be lowered to EUR 15,000;
• Pension benefit will be based on average wage over period of employment with a 2% annual accrual rate;
• The pension funds, not ING, will bear responsibility for funding adequacy; ING Bank and Insurance/IM to pay an additional risk premium;
• Responsibility for inflation indexation will move to the new funds; and
• Standard retirement age will be raised to 67.
As of the start of the new defined contribution plan on 1 January 2014, the current defined benefit plan has stopped accruing new
pension benefits. Accruals built up under the defined benefit plan up to that date will remain valid. The change to the new pension
scheme represents a curtailment under IFRS-EU and has resulted in a release of provisions previously taken by ING to cover estimated
future liabilities in the existing defined benefit plan that are now no longer required. This release amounted to a one-off after tax gain of
EUR 351 million (EUR 468 million before tax). The curtailment was included in the line Staff expenses in 2012. This curtailment related to
the defined benefit plan in the Netherlands, which represented approximately 75% of the above defined benefit obligation on 31
December 2012.
184 ING Group Annual Report 2013