Notes to the Consolidated Financial Statements continued - - Reportofthe Reportofthe Financial Other Contents Overview Executive Board Supervisory Board Statements 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. In 2015. the Trustee of SN PP implemented a longevity hedge to remove the risk of a higher increase in life expectancy than anticipated for current pensioners. 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 2015 2015 Discount rate as at 31 December 2.3 1.8 3.9 3.6 Future salary increases 2.0 2.0 Future pension increases 0.9 0.3 3.0 2.9 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: Africa, Middle East Europe Americas Eastern Europe In per cent 2015 2015 2015 Discount rate as at 31 December 0 CO 1 NJ Lo 1.0-1.9 7.0 7.3 12.0 15.0 Future salary increases Ln rd I O LO rd I O A.5 A.5 7.5 8.A Future pension increases 0.0-1.2 CO I O 3.5 3.5 3.0 3.2 Medical cost trend rate 0.0-A.5 0 1 Ln 5.1 5.1 A.5 6.8 Assumptions regarding future mortality rates are based on published statistics and mortality tables. For the Netherlands, the rates are obtained from the AG-Prognosetafel 201 A, fully generational. Correction factors from Towers Watson are applied on these rates. 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 2016 contributions to be paid for the defined benefit plans to be in line with 2015. 111 Helneken N.V. Annual Report 2015

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2015 | | pagina 112