BMW 2002 Annual Report Download - page 85

001 BMW Group in figures
004 Report of the Supervisory Board
008 Supervisory Board
011 Board of Management
012 Group Management Report
031 BMW Stock
034 Corporate Governance
042 Group Financial Statements
106 BMW AG Financial Statements
112 BMW Group Annual Comparison
114 BMW Group Locations
116 Glossary
120 Index
84
The level of the pension obligations differ
de-
pending on the pension system applicable in each
country. Since the state pension system in Great
Britain only provides a basic fixed amount benefit,
retirement benefits are largely organised in the form
of company pensions and arrangements financed by
the individual. The pension benefits in Great Britain
thus contain contributions made by the employee.
In the financial year 2002, pension obligations
relating to employees transferred to the Phoenix
Consortium and Ford Motor Company in conjunction
with the Rover Group disengagement were settled.
Following the transfer of the obligations and the
relevant fund assets, pension obligations and fund
assets both fell by euro 1,338 million. At the date of
the transfer,
pension obligations and fund assets
were recalculated, giving rise to an additional expense
of euro 67 million.This amount had already been
recognised in provisions in previous years.
Pension provisions relating to pension plans in
other countries amounted to euro 107 million (2001:
euro101 million).This includes euro 32 million (2001:
euro 32 million) relating to externally funded plans.
Actuarial losses in excess of a corridor of 10%
of the defined benefit obligations amount to euro
119 million. They are required to be recognised as
expenses over the average remaining working lives
of the relevant employees.These losses will result in
additional expense in 2003 of euro 6 million in Great
Britain, euro 2 million in the USA and euro 1 million
in Switzerland.The current shortfall in Germany is
attributable to the reduction in the discount factor
from 6.0% to 5.75% in the light of capital market
developments.
The defined benefit plans of the BMW Group
gave rise to a total pension expense in the financial
year 2002 of euro 344 million (2001: euro 2601] mil-
lion), comprising the following components:
in euro million Germany GB Other countries Total
2002 2001 2002 2001 2002 2001 2002 2001
Current service cost 62 671] 52 56 31 29 145 1521]
Interest cost 112 109 327 391 13 11 452 511
Expected return on plan assets ()   313  395 12 12  325  407
Actuarial gains and losses  211233
Past service cost  2121
Effect of plan settlements (recognised
in provisions in previous years)  67 67 
Total expense 174 176 1] 135 53 35 31 344 260 1]
1] adjusted for employee contributions to the deferred remuneration retirement scheme of euro 28 million