Siemens 2005 Annual Report Download - page 117
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117
Siemens’ funding policy for its pension funds is part of its overall commitment to a sound
financial management, which also includes an ongoing analysis of the structure of its pension
liabilities, particularly the duration by class of beneficiaries. We constantly review the asset
allocation of each plan in light of the duration of the related pension liabilities and analyze
trends and events that may affect asset values in order to initiate appropriate measures at a very
early stage.
The Company also regularly reviews the design of its pension plans. Historically, the majority
of Siemens pension plans have included significant defined benefits. However, in order to reduce
the Company’s exposure to certain risks associated with defined benefit plans, such as longevity,
inflation, effects of compensation increases and other factors, we implemented new pension
plans in some of our major subsidiaries including Germany, the U.S. and the UK. The benefits of
these new plans are based predominantly on contributions made by the Company and, to a minor
extent, the effects of longevity, inflation adjustments and compensation increases. We expect to
continue to review the need for the implementation of similar plan designs outside Germany in
the coming years to better control future benefit obligations and related costs.
For more information on Siemens pension plans, see “Notes to Consolidated Financial
Statements.”
Management’s discussion and analysis
Consolidated Financial Statements Notes to Consolidated Financial Statements