Philips 2006 Annual Report Download - page 207

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Philips Annual Report 2006 207
5050
5151
52
Pensions and postretirement benefi ts other than pensions
Defi ned-benefi t plans
Employee pension plans have been established in many countries in
accordance with the legal requirements, customs and the local situation
in the countries involved. The majority of employees in Europe and
North America are covered by defi ned-benefi t plans. The benefi ts
provided by these plans are based on employees’ years of service and
compensation levels. The measurement date for all defi ned-benefi t
plans is December 31.
Contributions are made by the Company, as necessary, to provide assets
suffi cient to meet the benefi ts payable to defi ned-benefi t pension plan
participants. These contributions are determined based upon various
factors, including funded status, legal and tax considerations as well as
local customs.
Movements in the net liability for defi ned-benefi t obligations:
2005 2006
Projected benefi t obligation at the beginning of year 19,510 21,134
Service cost 343 327
Interest cost 949 942
Employee contributions 14 10
Actuarial (gains) or losses 1,064 (26 )
Plan amendments (35 ) 3
Settlements (92 ) (179 )
Curtailments 0 (261 )
Changes in consolidation 2 (173 )
Benefi ts paid (1,114 ) (1,147 )
Exchange rate differences 500 (223 )
Miscellaneous (7 ) 3
Projected benefi t obligation at end of year 21,134 20,410
Present value of funded obligations at end of year 20,075 19,532
Present value of unfunded obligations at end of year 1,059 878
5252
Movement in plan assets:
2005 2006
Plan assets
Fair value of plan assets at beginning of year 18,628 20,830
Expected return on plan assets 1,102 1,214
Actuarial (gains) and losses on plan assets 1,393 (164 )
Employee contributions 14 10
Employer contributions 367 928
Settlements (87 ) (182 )
Changes in consolidation 9 (23 )
Benefi ts paid (1,030 ) (1,076 )
Exchange rate differences 434 (185 )
Miscellaneous − −
Fair value of plan assets at end of year 20,830 21,352
Funded Status (304 ) 942
Unrecognized net transition obligation − −
Unrecognized prior service cost 16 12
Unrecognized net loss 402 558
Unrecognized net assets (1,631 ) (2,235 )
Net balance sheet position (1,517 ) (723 )
Classifi cation of the net balance
2005 2006
Prepaid pension costs under other
non-current assets
-
95 343
Accrued pension costs under other
non-current liabilities
-
(687 ) (298 )
Accrued pension costs related to
discontinued operations
-
(2 ) −
Provision for pensions under provisions - (780 ) (768 )
Provision for pensions related to
discontinued operations
-
(143 ) −
(1,517 ) (723 )
226 Corporate governance224 Reconciliation of
non-US GAAP information
234 The Philips Group
in the last ten years
236 Investor information