Philips 2007 Annual Report Download - page 158

Philips Annual Report 2007164
20
Pensions
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 dened-benet pension plans. The
benets provided by these plans are based on employees’ years of
service and compensation levels. The measurement date for all
dened-benet pension plans is December 31.
For funded plans the Company makes contributions, as necessary,
to provide assets sufcient to meet the benets payable to dened-
benet pension plan participants. These contributions are determined
based upon various factors, including funded status, legal and tax
considerations as well as local customs.
2005 2006 2007
Summary of pre-tax costs for
pension plans and retiree
healthcare plans
Dened - benet plans 157 75 27
Dened - contribution plans incl.
multi-employer plans 56 80 84
Medical retiree cost (see note 21) (101) 39 36
112 194 147
The Company funds certain dened-benet pension plans as claims
are incurred. The projected benet obligation, accumulated benet
obligation and fair value of plan assets for both funded and unfunded
dened-benet pension plans with accumulated benet obligations
in excess of plan assets are included in the table below:
2006 2007
Projected benet obligation 3,791 4,476
Accumulated benet obligation 3,600 4,356
Fair value of plan assets 2,543 3,445
The table below provides a summary of the changes in the pension
benet obligations and dened pension plan assets for 2007 and 2006
and a reconciliation of the funded status of these plans to the amounts
recognized in the consolidated balance sheets:
2006 2007
Netherlands other total Netherlands other total
Projected benet obligation
Projected benet obligation at beginning of year 12,936 8,198 21,134 12,396 8,014 20,410
Service cost 198 129 327 147 118 265
Interest cost 531 411 942 521 399 920
Employee contributions 1 9 10 − 4 4
Actuarial (gains) losses (325) 299 (26) (670) (86) (756)
Plan amendments − 3 3 − 4 4
Curtailments (185) (76) (261)1) − 2 2
Settlements (76) (103) (179)1) (435) (67) (502)3)
Changes in consolidation − (173) (173)1) − 49 49
Benets paid (684) (463) (1,147) (700) (452) (1,152)
Exchange rate differences − (223) (223) − (564) (564)
Miscellaneous − 3 3 1 (2) (1)
Projected benet obligation at end of year 12,396 8,014 20,410 11,260 7,419 18,679
Present value of funded obligations at end of year 12,378 7,154 19,532 11,245 6,621 17,866
Present value of unfunded obligations at end of year 18 860 878 15 798 813
Plan assets
Fair value of plan assets at beginning of year 14,491 6,339 20,830 14,521 6,831 21,352
Actual return on plan assets 559 491 1,050 320 325 645
Employee contributions 1 9 10 − 4 4
Employer contributions 232 696 928 145 187 332
Settlements (79) (103) (182)2) (516) (61) (577)3)
Changes in consolidations − (23) (23)2) − 53 53
Benets paid (683) (393) (1,076) (700) (383) (1,083)
Exchange rate differences − (185) (185) − (525) (525)
Miscellaneous − − − 1 (2) (1)
Fair value of plan assets at end of year 14,521 6,831 21,352 13,771 6,429 20,200
Funded status 2,125 (1,183) 942 2,511 (990) 1,521
1) Of which EUR (237) million (curtailments); EUR (79) million (settlements other); EUR (173) million (changes in consolidation) is discontinued operations
2) Of which EUR (79) million (settlements other); EUR (23) million (changes in consolidation) is discontinued operations
3) Of which EUR (473) million (PBO) and EUR (560) million (Assets) is discontinued operations
128 Group nancial statements
Notes to the group nancial statements
188 IFRS information 240 Company nancial statements