Notes to the Consolidated Financial Statements (continued)
9 Provisions and contingent liabilities
9.1 Post-retirement obligations
O O Qs
Introduction Report of the Executive Board Report of the Supervisory Board
HEINEKEN makes contributions to pension plans that provide pension benefits to (former) employees upon
retirement, both via defined benefit as well as defined contribution plans. Other long-term employee benefits
include long-term bonus plans, termination benefits, medical plans and jubilee benefits. Refer to note 6.4
for the contribution to defined contribution plans. This note relates to HEINEKEN's defined benefit pension
plans. Refer to the table below for the present value of the defined benefit plans as at 31 December.
In millions of
2019
2018
Present value of unfunded defined benefit obligations
Present value of funded defined benefit obligations
307
9,210
251
8,260
Total present value of defined benefit obligations
Fair value of defined benefit plan assets
9,517
(8,541)
8,511
(7,682)
Present value of net obligations
Asset ceiling items
Defined benefit plans included under non-current assets
1,066
53
7
829
51
7
Recognised liability for defined benefit obligations
Other long-term employee benefits
1,126
63
887
67
1,189
954
The vast majority of benefit payments are from pension funds that are held in trusts (or equivalent),
however, there is a small portion where HEINEKEN fulfils the benefit payment obligation as it falls due.
Plan assets held in trusts are governed by Trustee Boards composed of HEINEKEN representatives
and independent and/or member representation, in accordance with local regulations and practice in
each country. The relationship and division of responsibility between HEINEKEN and the Trustee Board
(or equivalent) including investment decisions and contribution schedules are carried out in accordance
with the plan's regulations.
Financial Statements
Sustainability Review
Heineken N.V. Annual Report 2019
Other Information
The defined benefit pension plans in the Netherlands and the United Kingdom represent the majority of the
total defined benefit plan assets and the present value of the defined benefit obligations. Refer to the table
below for the split of these plans in the total present value of the net obligations of HEINEKEN.
In millions of
2019
UK
2018
UK
2019
NL
2018
NL
2019
Other
2018
Other
2019
Total
2018
Total
Total present value
of defined benefit
obligations
3,945
3,611
4,096
3,587
1,476
1,313
9,517
8,511
Fair value of defined
benefit plan assets
(3,529)
(3,276)
(3,939)
(3,488)
(983)
(918)
(8,541)
(7,682)
Present value of
net obligations
416
335
157
99
493
395
1,066
829
Defined benefit plan in the Netherlands
HEINEKEN provides employees in the Netherlands with an average pay pension plan based on earnings up
to the legal tax limit. Indexation of accrued benefits is conditional on the funded status of the pension fund.
HEINEKEN pays contributions to the fund up to a maximum level agreed with the Board of the pension fund
and has no obligation to make additional contributions in case of a funding deficit. In 2019, HEINEKEN's
cash contribution to the Dutch pension plan was at the maximum level. The same level is expected to be
paid in 2020. As a result of an agreed final payment to settle a closed transitional plan, a one-off contribution
of €85 million is expected to be paid in late 2020 or early 2021. Following this payment, the respective plan
will be fully funded.
Defined benefit plan in the United Kingdom
HEINEKEN's UK plan (Scottish Newcastle pension plan 'SNPP') was closed to future accrual in 2011 and
the liabilities thus relate to past service before plan closure. Based on the triennial review finalised in early
2019, HEINEKEN has renewed the funding plan (until 31 May 2023) including an annual deficit reduction
contribution of GBP39.2 million in 2018, thereafter increasing with GBP1.7 million per year. At the end
of 2018, an agreement (the Funding Agreement) was reached with the UK pension fund Trustees on a
more conservative longer-term funding and investment approach towards 2030. This agreement has been
formalised during 2019 and leads to a gradual decrease of investment risk. The current schedule of deficit
recovery payments until May 2023 will remain in place. As of June 2023 deficit recovery payments will be
conditional on the funding position of the pensions fund and will be capped on the current contribution level.
Defined benefit plans in other countries
In a few other countries HEINEKEN offers defined benefit plans, which are individually not significant to
HEINEKEN. The majority of these plans are closed for new participants.
