110
2005 FINANCIAL STATEMENTS
The provision for pensions relates to defined benefit plans.
The following weighted average economic assumptions were employed
to determine the net periodic pension and post retirement plans' expense
and net liability.
It is estimated that an increase of one percent in the value of the euro
against U.S. Dollar has no material impact on the financing results.
Most of the financial instruments qualify for hedge accounting (under
IAS 39). To apply for hedge accounting requires the hedges to be highly
effective. During 2005 a loss of 00.7 million was recorded in the income
statement as a result of ineffectiveness of hedges.
The mortality tables used are generally accepted in the applicable
countries. The average increase in salaries is based on the non-closed
pension plans. The medical trend rate is capped at 5% as stipulated by
the Group's post-retirement medical plan in the United States.
A decrease of 0.50% of the discount rate would increase the plan
liabilities by approximately 000 million, and would increase the service
costs with approximately 00 million.
PROVISION FOR PENSIONS
Employee Benefits
note 20
2005
2004
Employee Benefits
Pension and post employment plans
227
186
Other (post) employment obligations
23
31
00/span>
Total
250
217
2005
2004
Economic assumptions
in %
Pension schemes
Discount rate
4.3
4.9
Expected return on assets
5.3
5.8
Average increase salaries
3.5
3.5
Post retirement plans
Discount rate
5.3
6.0
Medical trend rate
5.0
5.0
Wolters
Kluwer
2005
Annual
Report
Plan liabilities and assets
Plan liabilities
Fair value as at January 1 [1]
919
816
85
120
Service costs
15
15
2
3
Interest costs
43
43
4
5
Benefits paid
(33)
(31)
(6)
(5)
Actuarial (gain) or loss
49
100
6
(14)
Plan participants' contributions
6
7
0
-
Curtailment (gain) or loss
0
(18)
0
-
Exchange rate differences
30
(18)
13
(7)
Plan amendments
(15)
5
-
(28)
00/span>
Fair value as at December 31
1,014
919
104
74
Plan assets
Fair value as at January 1 [1]
817
727
0
0
Return on plan assets
86
67
-
-
Benefits paid by fund
(33)
(34)
(6)
(5)
Employer contribution
16
57
6
5
Plan participants' contribution
6
7
-
-
Exchange rate differences
26
(7)
-
-
00/span>
Fair value as at December 31
918
817
0
0
Funded status
Funded status as at December 31
96
102
104
74
Unrecognized past service costs
11
(5)
16
15
00/span>
Net liability as at December 31
107
97
120
89
Pension costs
Service costs
15
15
2
3
Interest costs
43
43
4
5
Expected return on assets
(47)
(46)
0
-
Amortization unrecognized past service costs
1
-
(1)
(13)
00/span>
Total pension costs
12
12
5
(5)
111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The plan amendment of 005 million relates to a change in the pension plan
in the Netherlands where the pre-pension arrangement has been altered.
2004
2004
2005
2005
Pension plans
Post employment plans
[1] In 2005 some defined benefit plans are classified
as pension plans and post retirement plans,
which were classified under other post employment
obligations in 2004.
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