Engineering
Engineering
Engineering
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3.6 Consolidated financial statements Notes to the consolidated financial statements<br />
Accrued postretirement obligations other than pensions<br />
The Group provides certain postretirement health care and life<br />
insurance benefits to retired employees in the USA who meet certain<br />
minimum requirements regarding age and length of service. The plans<br />
primarily relate to the retained assets and liabilities of ThyssenKrupp<br />
Budd. The plans existing in Canada were settled in cash in fiscal year<br />
2010/2011.<br />
In December 2003, the US government signed into law the Medicare<br />
Prescription Drug, Improvement and Modernization Act. This law<br />
provides for a federal subsidy to sponsors of retiree health care benefit<br />
plans that provide benefit that is at least actuarially equivalent to the<br />
benefit established by the law. The Group accounts for these federal<br />
subsidies as reimbursement rights in accordance with IAS 19.<br />
Changes in accumulated postretirement benefit obligations and<br />
reimbursement rights<br />
The changes in accumulated postretirement benefit obligations and<br />
reimbursement rights are as follows:<br />
million €<br />
Sept. 30,<br />
2010<br />
USA/Canada<br />
Sept. 30,<br />
2011<br />
USA/Canada<br />
Change in accumulated postretirement benefit<br />
obligation:<br />
Accumulated postretirement benefit obligation at<br />
beginning of fiscal year 1,040 1,188<br />
Service cost 6 7<br />
Interest cost 58 54<br />
Past service cost (52) 0<br />
Actuarial (gains)/losses 102 (83)<br />
Curtailments and settlements 0 (115)<br />
Currency differences 81 12<br />
Benefit payments<br />
Accumulated postretirement benefit obligation at end of<br />
(47) (46)<br />
fiscal year 1,188 1,017<br />
Change in reimbursement rights relating to<br />
postretirement benefits:<br />
Fair value of reimbursement rights at beginning of fiscal<br />
year 76 94<br />
Expected return on reimbursement rights 5 4<br />
Actuarial gains/(losses) 12 (9)<br />
Currency differences 6 1<br />
Benefit payments (5) (2)<br />
Fair value of reimbursement rights at end of fiscal year 94 88<br />
Consolidated financial statements<br />
168 | 169<br />
Funded status and net amount recognized<br />
The following represents the funded status of these plans including the<br />
reconciliation to the net amount recognized:<br />
million €<br />
Sept. 30,<br />
2010<br />
USA/Canada<br />
Sept. 30,<br />
2011<br />
USA/Canada<br />
Funded status at end of fiscal year (1,188) (1,017)<br />
Unrecognized past service cost<br />
Net amount recognized for postretirement obligations<br />
(69) (63)<br />
other than pensions (1,257) (1,080)<br />
Net periodic postretirement benefit cost<br />
The net periodic postretirement benefit cost for health care obligations<br />
is as follows:<br />
million €<br />
Year ended<br />
Sept. 30,<br />
2010<br />
USA/Canada<br />
Year ended<br />
Sept. 30,<br />
2011<br />
USA/Canada<br />
Service cost 6 7<br />
Interest cost 58 54<br />
Expected return on reimbursement rights (5) (4)<br />
Past service cost (21) (6)<br />
Settlement and curtailment loss/(gain) 0 (90)<br />
Net periodic postretirement benefit cost 38 (39)<br />
Assumptions<br />
The determination of the accumulated postretirement benefit<br />
obligations is based on the following weighted average assumptions:<br />
%<br />
Sept. 30,<br />
2010<br />
USA/Canada<br />
Sept. 30,<br />
2011<br />
USA/Canada<br />
Weighted-average assumptions:<br />
Discount rate 4.77 4.75<br />
Health care cost trend rate for the following year<br />
Ultimate health care cost trend rate<br />
9.78 9.62<br />
(expected in 2032) 5.00 5.00