Siemens 2006 Annual Report Download - page 200

Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
196
Regular funding is generally based on the level of service costs incurred. For the BSAV fund-
ing corresponds to the contributions to the beneficiaries account. Future funding decisions for
the Company’s pension plans will be made with due consideration of developments affecting
plan assets and pension liabilities, taking into account minimum funding requirements
abroad and local tax deductibility.
Pension benefits: Pension benefit payments
The following overview comprises pension benefits paid out of the principal pension benefit
plans during the years ended September 30, 2006 and 2005, and expected pension payments
for the next five years and in the aggregate for the five years thereafter (undiscounted):
As pension benefit payments for Siemens’ principal funded pension benefit plans reduce
the PBO and plan assets by the same amount, there is no impact on the funded status of such
plans.
Other postretirement benefits
In Germany, employees who entered into the Company’s employment on or before September
30, 1983, are entitled to transition payments for the first six months after retirement equal to
the difference between their final compensation and the retirement benefits payable under
the corporate pension plan. Certain foreign companies, primarily in the U.S., provide other
postretirement benefits in the form of medical, dental and life insurance. The amount of
obligations for other postretirement benefits in the form of medical and dental benefits spe-
cifically depends on the expected cost trend in the health care sector. To be entitled to such
healthcare benefits participants must contribute to the insurance premiums. Participant con-
tributions are based on specific regulations of cost sharing which are defined in the benefit
plans. The Company has the right to adjust the cost allocation at any time, generally this is
done on an annual basis. Premiums for life insurance benefits are paid solely by the Company.
Other postretirement benefits are illustrated in detail in the subsequent sections with
regard to:
■Obligations and funded status,
■Plan assets,
■Components of net periodic benefit cost for other postretirement benefits,
■Assumptions used in the calculation of the APBO and the net periodic benefit cost for other
postretirement benefits, and
■Benefit payments.
Total Domestic Foreign
Pension benefits paid
2005 1,032 751 281
2006 1,125 788 337
Expected pension payments
2007 1,265 829 436
2008 1,309 860 449
2009 1,353 885 468
2010 1,403 907 496
2011 1,416 942 474
2012– 2016 7,885 5,104 2,781