CONTENTS - Capgemini

B) Analysis of movements in provisions
Analysis of changes in the present value of pension obligations and plan assets
in millions of euros
Present value
of obligation
Fair value
of plan assets
Net provisions in
the balance sheet
At January 1, 2005
Net expense for the year:
1,203 (857) 346
– Service cost 78 - 78
– Interest cost 73 - 73
– Expected return on plan assets - (68) (68)
Benefits paid to employees (31) 28 (3)
Contributions paid - (57) (57)
Changes in actuarial gains and losses 313 (120) 193
Translation adjustments 63 (50) 13
Aspire Plan at transfer date (1) 178 (165) 13
Other movements 11 (14) (3)
At December 31, 2005
Net expense for the year:
1,888 (1,303) 585
– Service cost 91 - 91
– Interest cost 93 - 93
– Effect of curtailments and settlements (2) (27) 17 (10)
– Expected return on plan assets - (89) (89)
Contributions paid by employees 6 (6) -
Benefits paid to employees (37) 37 -
Contributions paid - (57) (57)
Changes in actuarial gains and losses (81) (73) (154)
Translation adjustments 6 - 6
Other movements 18 (15) 3
At December 31, 2006 1,957 (1,489) 468
(1) Commitments related to the signing of the Aspire contract in the UK were transferred in 2005, as the voluntary subscription period open to employees
in respect of Capgemini UK Plc’s retirement plan expired during the first half of 2005. At the transfer date, the previous service provider undertook
to refinance the plan, concerning 1,530 employees, based on a valuation performed by actuaries.
(2) In 2006, plan curtailments and settlements essentially concern employee transfers in connection with the sale of infrastructure and network management
services to British Telecom in the United Kingdom.
Service cost for the year amounts to €91 million – mainly concerning
the United Kingdom (€68 million) and Canada (€12 million) – and
is calculated on the basis of the assumptions detailed below.
Interest cost for the year corresponds to the discounting of the obligation
in an amount of €93 million, which chiefly concerns the United
Kingdom (€76 million) and Canada (€11 million) and is calculated
on the basis of the assumptions detailed below.
The expected return on plan assets (€89 million) mainly concerns
the United Kingdom (€72 million) and Canada (€13 million) and is
calculated on the basis of the assumptions detailed below.
Benefits paid to employees, totaling €37 million, chiefly relate to the
United Kingdom (€20 million) and Canada (€10 million).
Contributions to plan assets totaled €57 million during the year.
The main contributors were the United Kingdom (€40 million) and
Canada (€12 million).
Analysis of changes in recognized actuarial gains and losses
Changes in actuarial gains and losses reflect increases or decreases
in the present value of the obligation or the fair value of the related
plan assets.
Actuarial gains and losses include (i) the impacts of changes in actuarial
assumptions (essentially the discount rate and expected rate of
return on plan assets) and (ii) the effects of differences between the
projected actuarial assumptions and actual outcomes (experience
adjustments, as described in section III – “Analysis of actuarial gains
and losses: experience adjustments”).
The €193 million recognized actuarial loss in 2005 arises essentially
from the decrease in rates used to discount obligations in the United
Kingdom and Canada, and also from the adoption of a new mortality
table in the United Kingdom.
The €154 million recognized actuarial gain in 2006 reflects changes in
actuarial assumptions, of which €125 million is due to the 0.5-point
increase in the discount rate in the United Kingdom.
ANNUAL REPORT 2006 Capgemini
99