2012 Registration document and annual financial report - BNP Paribas

CONSOLIDATED FINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statements4In Belgium, BNP Paribas Fortis provides a defined-benefit plan for itsemployees and middle managers who joined the bank before its pensionplans were harmonised on 1 January 2002, based on final salary andthe number of years’ service. The obligation is partially funded throughAG Insurance, in which the BNP Paribas Group owns an 18.7% interest.BNP Paribas Fortis’ senior managers have a pension plan that provides alump sum based on the number of years of service and final salary, whichis partially funded through AXA Belgium and AG Insurance.Under Belgian and Swiss law, the employer is responsible for aguaranteed minimum return on defined-contribution plans. As a resultof this obligation, these plans are classified as defined-benefit plans.Defined-benefit pension plans remain in place in certain countries, butare generally closed to new members. They are based either on thevesting of a pension linked to the employee’s final salary and length ofservice (United Kingdom) or on the annual vesting of rights to a lumpsum expressed as a percentage of annual salary and paying interest at apredefined rate (United States). Some plans are top-up schemes linked tostatutory pensions (Norway). Some plans are managed by an insurancecompany (Netherlands), a foundation (Switzerland) or by independentfunds (United Kingdom).In Turkey, the pension plan replaces the national pension scheme and ismeasured based on the terms of transfer to the Turkish state.Obligations under defined benefit plansThis plan is fully funded by financial assets held with an externalfoundation.On 31 December 2012, Belgium, the United Kingdom, the United States,Switzerland and Turkey represented 91% of the total gross defined-benefitobligations outside France. The fair value of the related plan assets wassplit as follows: 59% bonds, 17% equities, 24% other financial instruments(including 11% in insurance contracts).Other post-employment benefitsGroup employees also receive various other contractual post-employmentbenefits, such as indemnities payable on retirement. BNP Paribas’obligations for these benefits in France are funded through a contractheld with a third-party insurer. In other countries, the gross obligations ofthe Group are mainly concentrated in Italy (80%), where pension reformschanged Italian termination indemnity schemes (TFR) into definedcontributionplans effective from 1 January 2007. Rights vested up to31 December 2006 continue to be qualified as defined-benefit obligations.Post-employment healthcare plansIn France, BNP Paribas has no longer any obligation in relation tohealthcare benefits for its retired employees. Several healthcare benefitplans for retired employees exist in other countries, mainly in the UnitedStates and Belgium.4➤ ASSETS AND LIABILITIES RECOGNISED ON THE BALANCE SHEETPost-employment benefitsPost-employment healthcare benefitsIn millions of euros31 December 2012 31 December 2011 31 December 2012 31 December 2011Present value of defined benefit obligation 8,662 8,351 147 121Defined benefit obligation arising from wholly or partiallyfunded plans 7,761 7,517 - -Defined benefit obligation arising from wholly unfundedplans 901 834 147 121Fair value of plan assets (4,148) (3,798) - -Fair value of reimbursement rights (1) (2,639) (2,463) - -Cost not yet recognised in accordance with IAS 19 (546) (407) (24) (5)Prior service costs (153) (164) - 1Net actuarial gains/(losses) (393) (243) (24) (6)Effect of asset ceiling 209 91 - -NET OBLIGATION RECOGNISED IN THE BALANCE SHEETFOR DEFINED-BENEFIT PLANS 1,538 1,774 123 116Asset recognised in the balance sheet for defined-benefitplans (2,796) (2,624) - -of which net assets of defined-benefit plans (157) (161) - -of which fair value of reimbursement rights (2,639) (2,463) - -Obligation recognised in the balance sheet for definedbenefitplans 4,334 4,398 123 116(1) The reimbursement rights are principally found on the balance sheet of the Group’s insurance subsidiaries notably AG Insurance with respect to BNPParibas Fortis’ defined-benefit plan to hedge its commitments to other Group entities that were transferred to them to cover the post-employmentbenefits of certain employee categories .2012 Registration document and annual financial report - BNP PARIBAS 167