Siemens 2014 Annual Report Download - page 284

108 A. To our Shareholders 131 B. Corporate Governance 171 C. Combined Management Report

The net interest income / expense for fiscal year  improves by
€  million due to the refined determination of discount rate.
A detailed reconciliation of the changes in the fair value of plan
assets for fiscal  and  is provided in the following table:
Year ended September ,
(in millions of €)  
Change in plan assets:
Fair value of plan assets at beginning of year 24,078 24,057
Interest income 802 745
Remeasurements:
Return on plan assets excluding
amounts included in net interest income
and net interest expenses 2,098 507
Employer contributions 533 528
Plan participants’ contributions 122 105
Benefits paid (1,514) (1,476)
Settlement payments (7) (67)
Business combinations, disposals and other (122) 93
Liability administration costs (8) (16)
Foreign currency translation effects 525 (397)
Fair value of plan assets at end of year 26,505 24,078
Line item Business combinations, disposals and other in the
tables above contains reclassifications to assets and to liabili -
ties held for disposal.
Actuarial assumptions
Assumed discount rates, compensation increase rates, pension
progression rates and mortality rates used in calculating the
DBO vary according to the economic and other conditions of
the country in which the retirement plans are situated.
The weighted-average discount rate used for the actuarial valu-
ation of the DBO at period-end was as follows:
September ,
 
Discount rate 3.0 % 3.4 %
Germany 2.4 % 3.1 %
U.S. 4.6 % 3.7 %
U.K. 4.5 % 4.5 %
CH 1.8 % 2.1 %
The data selection criteria used to derive the discount rate in
the major currency zones (EUR, GBP, USD, CHF) and the extra-
polation were refined as of September , . The discount
rate was derived from high-quality corporate bonds with an
issuing volume of more than  million units in the respective
currency zones, which have been awarded an AA rating (or
equivalent) by at least one of the two rating agencies Moody’s
Investor Service or Standard & Poor’s Rating Services.
The mortality tables used for the actuarial valuation of the DBO
were as follows (most significant countries):
Germany Heubeck Richttafeln 2005 G (modified)
U.S. RP2000 Combined Healthy
Fully Generational Mortality Table and
longevity improvement scale BB2D
U.K. S1PxA (Standard mortality tables
for Self Administered Pension Schemes
(SAPS) with allowance for future
mortality improvements)
CH BVG 2010 G
The rates of compensation increase for countries with signifi-
cant effects with regard to this assumption were as follows in
fiscal  and : U.K.: . % and . %, Switzerland: . %
and . %. The rates of pension progression for countries with
significant effects with regard to this assumption were as fol-
lows in fiscal  and : Germany: . % and . %, U.K.:
. % and . %.
The DBO is also affected by assumed future inflation rates. The
effect of inflation is recognized within the assumptions above
where applicable.
Sensitivity analysis
A one-half-percentage-point change of the established assump-
tions mentioned before, used for the calculation of the DBO as
of September ,  and , would result in the following
increase (decrease) of the DBO:
Effect on DBO due to a
one-half percentage-point
as of September 
(in millions of €) increase decrease
Discount rate (2,100) 2,361
Rate of compensation increase 95 (90)
Rate of pension progression 1,590 (1,441)