Loreal 2011 Annual Report Download - page 188

186 REGISTRATION DOCUMENT − L’ORÉAL 2011
6Corporate social, environmental and societal responsibility
Social information
Defined contribution scheme
In September2003, L’Oréal set up a “defined contribution pension
scheme”.
A new agreement was signed in December2007, with effect
from January1st, 2008, as well as a supplemental agreement
applicable as from January1st, 2009.
All executives and sales representatives affiliated with the CIPC-R
are beneficiaries of this scheme.
The basis for contributions, which remains unchanged, amounts
to between once and 6 times the French social security ceiling,
with a contribution of 4% since January1st, 2008, shared by the
Company and the employees.
This scheme grants entitlement to the payment to the beneficiary
retiree, after he/she has applied for his/her pension entitlement
from the French Social Security compulsory pension scheme,
of a Life Annuity as well as, after his/her death, the payment
to the spouse and/or ex-spouse (s) of a surviving Spouse
Pension. The Life Annuity is calculated on the basis of the capital
formed by the contributions made and the financial income
on such contributions at the end of the employee’s career.
The employer’s commitment is limited to the payment of the
contributions stipulated.
Pre-retirement arrangements
L’Oréal pays close attention to the retirement conditions of its
employees and pre-retirement arrangements that have been
in force for a number of years, which have been confirmed and
improved within the scope of the agreement on the employment
of older workers, signed on December3rd, 2009, which provides
in particular for the introduction of a time savings account for
older employees:
♦the early retirement leave (CFC): this pre-retirement
arrangement consists of exempting employees from the
requirement to perform their activities; but during this period,
they remain employees of L’Oréal and continue to receive
their remuneration (within the limit of €9,280 gross/month)
as well as M andatory Profit Sharing , I ncentive payments and
paid leave;
♦early retirement leave under the time savings account: t his
arrangement, linked to the 35-hours working week agreement
and the Time Savings Account (Compte Epargne Temps –
C.E.T), enables an employee who has saved 3 days’ leave
per year under the C.E.T. each year since 2001, to benefit from
the possibility to terminate his/her activities at least 3months
earlier than scheduled (6 months for sales representatives),
and this possibility can be combined with the early retirement
leave;
♦retirement Indemnities: a new scale of indemnities at L’Oréal
was implemented by a collective agreement as from2011,
which is more favourable than the French National Collective
Bargaining Agreement for the Chemical Industries.
Thus, when he/she retires, an employee may benefit from
retirement indemnities ranging from two month’s salary for five
years’ service, to 8months’ salary for 40years’ service.
In order to increase the special leave prior to retirement, the
employee may opt to convert his/her retirement indemnities into
time, or he/she may choose to receive payment of the retirement
indemnities which will be made at the time when he/she leaves
the Company.
12.31.2009 12.31.2010 12.31.2011
M W Total M W Total M W Total
Early retirement leave 77 109 186 49 102 151 51 127 178
Compulsory retirement on the Company’s initiative 37 25 5
Voluntary retirement 187 234 162
(Source: HR France statistics 2009, 2010 and 2011).
These commitments are guaranteed partly by external financial
cover aimed at gradually building up funds resulting from
premiums paid to external organisations.
The commitments net of funds invested and the actuarial
differences are booked as a provision in consolidated balance
sheet liabilities.
The evaluation method adopted to calculate the retirement
and pre-retirement benefit commitments is the retrospective
method based on estimated calculations of the final salary.
These commitments take into account the employer’s
contribution to the healthcare schemes for retirees.
In euros 12.31.2009 12.31.2010 12.31.2011
Number of members 11,806 11,967 12,594
Total net contributions 7,497,479 8,027,527 8,742,485
€ millions 12.31.2009 12.31.2010 12.31.2011
Provision for pension commitments in consolidated balance sheet liabilities 585.9 687.8 662.6
(Source: HR France statistics 2009, 2010 and 2011).