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Contents
Overview
Report of the
Executive Board
Report of the
Supervisory Board
Financial
statements
Other
information
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
2014
2013
2014
2013
Discount rate as at 31 December
1.8
3.6
3.6
4.6
Future salary increases
2.0
2.0
Future pension increases 0.3 1.4 2.9 3.2
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 T1 Africa
The Americas r-
and Eastern Europe Middle East
In per cent
2014
2013
2014
2013
2014
2013
Discount rate as at 31 December
1.0-1.9
2.4-3.6
7.3
7.6
15
14.0
Future salary increases
1.0-3.5
1.0-3.5
4.5
3.9
8.4
9.2
Future pension increases
0.2-1.8
1.0-1.8
3.5
2.9
3.2
2.0
Medical cost trend rate 3.5-4.5 3.4-4.5 5.1 5.1 6.8 7.5
Assumptions regarding future mortality rates are based on published statistics and mortality tables. For the Netherlands, the rates are obtained
from the 'AG-Prognosetafel 2014', fully generational. Correction factors from Towers Watson are applied on these. For the UK, the 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 18 years.
HEINEKEN expects the 2015 contributions to be paid for the defined benefit plans to be in line with 2014.
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Fleineken N.V. Annual Report 2014