Siemens 2009 Annual Report Download - page 253

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 Managing Board statements, Independent auditors’ report, Additional information
 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise
stated and per share amounts)
the retirement plans are situated or where plan assets are in-
vested as well as capital market expectations.
The weighted-average discount rate used for the actuarial val-
uation of the DBO as of the balance sheet date and the ex-
pected return on plan assets for the fiscal year ending at the
balance sheet date were as follows:
Pension benefits: Assumptions for the calculation
of the DBO and NPBC
Assumed discount rates, compensation increase rates and
pension progression rates used in calculating the DBO to-
gether with long-term rates of return on plan assets vary ac-
cording to the economic conditions of the country in which
Year ended September 30, 2009 Year ended September 30, 2008
Total Domestic Foreign Total Domestic Foreign
Discount rate 5.3% 5.3% 5.2% 6.2% 6.4% 6.0%
Germany 5.3% 5.3% 6.4% 6.4%
U.S. 5.69% 5.69% 6.79% 6.79%
U.K. 5.7% 5.7% 6.5% 6.5%
Expected return on plan assets 6.5% 6.5% 6.4% 6.5% 6.5% 6.5%
Germany 6.5% 6.5% 6.5% 6.5%
U.S. 6.97% 6.97% 6.97% 6.97%
U.K. 6.5% 6.5% 6.7% 6.7%
B27T059_E
The rates of compensation increase for countries with signifi-
cant effects on the DBO as of the balance sheet date with re-
gard to this assumption were as follows for the years ended
September 30, 2009 and 2008: U.S.: 3.76% and 4.05%, U.K.
4.0% and 4.5%, Switzerland: 1.5% and 2.5%, Netherlands:
2.95% and 2.95%. The compensation increase rate for the do-
mestic pension plans for the year ended September 30, 2009,
was 2.25% (2008: 2.25%). However, due to the implementation
of the BSAV, the effect of the compensation increase on the
domestic pension plans is substantially eliminated. The rates
of pension progression for countries with significant effects
on the DBO as of the balance sheet date with regard to this as-
sumption were as follows for the years ended September 30,
2009 and 2008: Germany: 1.75% and 1.75%, U.K.: 3.0% and
3.6%, Netherlands: 1.5% and 2.0%.
The assumptions used for the calculation of the DBO as of the
balance sheet date of the preceding fiscal year are used to de-
termine the calculation of interest cost and service cost of the
following year. The total expected return for the fiscal year will
be based on the expected rates of return for the respective year
multiplied by the fair value of plan assets at the preceding fis-
cal years balance sheet date. The fair value and thus the ex-
pected return on plan assets are adjusted for significant events
after the balance sheet date, such as a supplemental funding.
The discount rate assumptions reflect the rates available on
high-quality corporate bonds or government bonds of consis-
tent duration and currency at the balance sheet date. The ex-
pected return on plan assets is determined on a uniform basis,
considering long-term historical returns, asset allocation, and
future estimates of long-term investment returns. For fiscal
2009 and fiscal 2008 the expected return on plan assets re-
mained primarily unchanged. Changes of other actuarial as-
sumptions not mentioned above, such as employee turnover,
mortality, disability, etc., had an only minor effect on the over-
all DBO for the years ended September 30, 2009 and 2008.
Experience adjustments, which result from differences be-
tween the actuarial assumptions and the actual occurrence,
decreased the DBO by 0.5% in fiscal 2009, increased the DBO
by 0.4% in fiscal 2008, did not affect the DBO in fiscal 2007 and
fiscal 2006 and increased the DBO by 0.8% in fiscal 2005.