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ePaper created 2015-05-06, 08:22:31 | version 1.38.0
83HERAEUS | FINANCIAL REPORT 2014 | CONSOLIDATED FINANCIAL STATEMENTS Defined benefit pension plans generally include entitlement to retirement, invalidity, widows’/ widowers’, and orphan’s pensions. The Company’s obligations encompass both current pensions and entitlements to future pensions. The benefits paid by the Group usually depend on employees’ years of service and earnings and are governed by different pension scheme rules. At Heraeus, defined benefit pension schemes are funded by way of both provisions and investment funds. The features of the main defined benefit pension arrangements and the risks to which they are exposed are described below. Most of the Group’s benefit obligations relate to German companies, whose employees are generally entitled to benefits under the following three different defined benefit pension schemes: For employees who joined the Company before January 1, 1988, the pension scheme dated October 24, 1979 applies. This is an employer-funded, final-salary pension scheme in which the pension benefit rises by a certain percentage of pensionable income for every qualifying year of service. The pension entitlements of employees who joined the Company after January 1, 1988 are governed by the 2001 I pension scheme dated May 14, 2001. They are entitled to benefits under an employer- funded, contribution-based scheme. The pension contributions paid under this scheme are converted actuarially – based on an age-related annuitization schedule assuming a defined guaranteed return – into ‘pension components’ that are credited to each beneficiary’s personal pension account. The level of pension contributions depends on each employee’s pensionable earnings. The 2001 II pension scheme, which was introduced by a company agreement dated May 14, 2001, enables participating employees to purchase additional pension benefits in a contribution-based scheme by making voluntary contributions. The deferred remuneration components are also converted into pension components. The pension entitlements governed by the 2001 pension scheme rules are each covered by investments in securities funds. Heraeus Pensionstreuhand e.V. manages this securities fund on the basis of contractual trust arrangements (CTAs) made with each German Group company. Since their introduction, both pension scheme I and pension scheme II have been refined and adjusted in line with changes in economic conditions. These pension scheme rules were revised with effect from January 1, 2010. The revision particularly related to the appropriation of the collectively agreed demographic contribution for retirement pensions and the adjustment of the guaranteed return on pension contributions.