Accruals in respect of beneficiaries’ and pensioners’ pension obligations are created using the projected unit credit method. This method takes account not only of known pensions and known earned future pension entitlements at the balance sheet date, but also of expected future increases in pensions and salaries having estimated the relevant influencing factors.
According to IAS 19.78, the discount rate used to discount accruals for pensions and similar commitments has to be determined at each valuation date. The discount rate is based on the market yields on high-quality corporate bonds. The terms of the corporate bonds have to be consistent with the estimated terms of the obligations.
Pension expenses which include the interest expenses as well as the actuarial gains and losses are recorded immediately in the relevant year’s profit for the period (Glossary) in the functional cost headings.
In June 2006, Wincor Nixdorf created plan assets according to IAS 19 as part of a Contractual Trust Arrangement (“CTA”), by transferring assets to a registered association (Wincor Nixdorf Pension Trust e. V.) in order to fund pension obligations to employees. Plan assets measured at fair value are netted with directly related pension obligations.
