ING Direct 2013 Annual Report Download - page 357

PROPOSED APPROPRIATION OF RESULT
The result is appropriated pursuant to Article 37 of the Articles of Association of ING Groep N.V., the relevant stipulations of which state
that the Executive Board, subject to the approval of the Supervisory Board, determines what part of the result is to be appropriated to
reserves and that the remaining part of the result shall be at the disposal of the General Meeting.
For 2013, the Executive Board, with the approval of the Supervisory Board, has determined to appropriate the entire result to reserves,
so that no dividend will be paid. In 2013, no interim dividend was paid.
Proposed appropriation of result
Net result 3,232
Addition to reserves pursuant to Article37(4) of the Articles of Association 3,232
At the disposal of the General Meeting of Shareholders pursuant to Article37(5) of the Articles of Association 0
Dividend of EUR0.00 per ordinary share
SUBSEQUENT EVENTS
Defined Benefits Pension Fund in The Netherlands
In February 2014 ING reached final agreement with the trade unions, the ING Pension Fund, the Central Works Council and the Association
of Retired ING Employees (VSI) to transfer all future funding and indexation obligations under ING’s current closed defined benefit plan in
the Netherlands to the Dutch ING Pension Fund. The agreement makes the ING Pension Fund financially independent from ING.
The key elements of the agreement:
• Responsibility for future indexation and funding thereof is transferred to the Dutch ING Pension Fund;
• ING’s obligation to restore the coverage ratio of the Dutch ING Pension Fund ceased;
• The cross guarantees between ING Bank and NN Group to jointly and severally fund the obligations of the Dutch ING Pension Fund are
terminated;
• ING pays EUR 549 million (before tax) to the Dutch ING Pension Fund for the removal of these obligations; and
• ING will reduce the employees’ own contribution to the pension premium under the new defined contribution plan by approximately
EUR 80 million over a 6 year period.
As part of the agreement, ING Bank and NN Group are released from all financial obligations arising out of the Dutch defined benefit plan.
Accordingly, this plan will no longer be accounted for as a defined benefit plan and, consequently, it will be removed from ING’s balance
sheet. The removal of the net pension asset related to the Dutch defined benefit pension fund from ING’s balance sheet of approximately
EUR 0.6 billion after tax and the payment to the Dutch ING Pension Fund of EUR 549 million (EUR 412 million after tax) will result in a
charge of approximately EUR 1.1 billion after tax to be recognised in 2014. Of this impact, EUR 0.7 billion is attributed to ING Bank and
EUR 0.4 billion to NN Group.
Accounting for GMDB in Japan Closed Block VA
NN Group has moved towards fair value accounting on the reserves for Guaranteed Minimum Death Benefits (GMDB) of the Japan Closed
Block VA as of 1 January 2014. This improves the alignment of the book value of the GMDB reserves with their market value, better
reflects the economic value of these guarantees and improves the alignment of the accounting for the guarantees with the accounting for
the related hedges. Furthermore, such a move makes the accounting for the GMDB consistent with the accounting on the reserves for
Guaranteed Minimum Accumulation and Withdrawal benefits.
As at the end of the fourth quarter of 2013, the difference between the current book value and the estimated fair value of the GMDB
reserves was EUR 219 million (before tax). Implementation of fair value accounting for GMDB represents a change in accounting policy
under IFRS with a transitional impact of EUR 165 million after tax being reflected only in shareholders’ equity as of 1 January 2014. Results
for comparative periods will be restated accordingly.
These measures have eliminated the DAC balance and improve the reserve adequacy on the Japan Closed Block VA. The accounting for
the Japan Closed Block VA guarantees is consistent and more in line with the related hedges.
ING U.S.
On 10 March 2014, ING Group announced that ING U.S., Inc., the U.S.-based retirement, investment and insurance businesses subsidiary,
has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) which is required to accommodate possible
future transactions to further reduce the current 56% interest of ING Group in ING U.S. The final structure, timing, size and offer price for
the possible transactions have not yet been determined at the date of this Annual Report and remain subject to market and other
conditions. If the possible transaction would result in deconsolidation of ING U.S. by ING Group, a divestment loss will be recognised in the
profit and loss account. This loss will reflect ING Group’s currently remaining share in the difference between the carrying value of ING
U.S. and the fair value (based on the transaction price), plus ING Group’s share in unrealised revaluations in equity plus the net currency
translation reserve related to ING U.S. Based on the quoted share price of ING U.S. and the reserves in equity (both as at 31 December
2013) such divestment loss is estimated to be approximately EUR 2 billion (before tax). The actual divestment loss may differ from this
estimate due to changes between 31 December 2013 and the date of deconsolidation.
Proposed appropriation of result and Subsequent events
amounts in millions of euros, except for amounts per share
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ING Group Annual Report 2013
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