-
-
-
-
-
Report of the Report of the
Contents Overview Executive Board Supervisory Board
Financial
statements
Other information
28. Employee benefits
Inflation risk
Some of the pension obligations are linked to inflation. Higher inflation will lead to higher liabilities, although in most cases caps on
the level of inflationary increases are in place to protect the plan against extreme inflation. The majority of the plan assets are either
unaffected by or loosely correlated with inflation, meaning that an increase in inflation will increase the deficit.
HEINEKEN provides employees in the Netherlands with an average pay pension plan, whereby indexation of accrued benefits
is conditional on the funded status of the pension fund. In the UK, inflation sensitivity is based on capped Consumer Price Inflation
for deferred members and capped Retail Price Inflation for pensions in payment.
Life expectancy
The majority of the plans' obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an
increase in the plans' liabilities. This is particularly significant in the UK plan, where inflation-linked increases result in higher sensitivity
to changes in life expectancy.
Principal actuarial assumptions as at the balance sheet date
Based on the significance of the Dutch and UK pension plans compared with the other plans, the table below only includes the major
actuarial assumptions for those two plans as at 31 December:
The Netherlands UK**
In per cent
2013
2012*
2013
2012*
Discount rate as at 31 December
3.6
3.0
4.6
4.4
Future salary increases
2.0
2.0
Future pension increases
1A
1.0
3.2
2.9
Medical cost trend rate
*Restated for the revised IAS 19.
**The UK plan closed for future accrual leading to certain assumptions being equal to zero.
For the other defined benefit plans the following actuarial assumptions apply at 31 December:
Other Western, Central Africa
and Eastern Europe The Americas Middle East
In per cent
2013
2012*
2013
2012*
2013
2012*
Discount rate as at 31 December
2.4-3.6
2.0-3.2
7.6
6.7
14.0
14.0
Future salary increases
1.0-3.5
1.0-3.5
3.9
3.8
9.2
10.8
Future pension increases
1.0-1.8
1.0-2.5
2.9
2.8
2.0
Medical cost trend rate
3.4-4.5
3.4-4.5
5.1
5.1
7.5
10.0
*Restated for the revised IAS 19.
Assumptions regarding future mortality rates are based on published statistics and mortality tables. For the Netherlands the rates
are obtained from the 'AG-Prognosetafel 2012-2062', fully generational. Correction factors from TowersWatson are applied on these.
FortheUKthe rates are obtained from the Continuous Mortality Investigation 2011 projection model.
The weighted average duration of the defined benefit obligation at the end of the reporting period is 17 years.
HEINEKEN expects the 2014 contributions to be paid for the defined benefit plans to be in line with 2013.
Heineken N.V. Annual Report 2013
108