Annual Report 2001 - Bohler Uddeholm materializing visions

Notes to the Consolidated Financial Statements 2001
56 BÖHLER-UDDEHOLM Annual Report 2001
The BÖHLER-UDDEHOLM Group has different pension plans for its employees, which are
determined by the legal, economic and tax conditions of the individual countries. In part, pension
obligations are financed via external funds. A significant proportion of current pension obligations
and entitlements to future pensions is covered by provisions. The obligations of our companies
are determined on the basis of the “protected-unit-credit method” in accordance with
IAS 19 (Employee Benefits — revised 2000). In the BÖHLER-UDDEHOLM Group, unexpected gains
or losses on assets held by external funds (actuarial gains or losses) are distributed uniformly
over the average remaining working period in accordance with the “corridor regulation” set
forth in IAS 19.92.
Pension obligations are calculated using the following parameters:
Interest rate Salary increase Pension increase
as % 2001 2000 2001 2000 2001 2000
Austria 6.5 5.5 3.0 2.3 1.5 1.5
Germany 6.5 6.0 3.0 2.5 1.5 1.5
Sweden 5.5 5.25 3.0 3.0 2.0 2.0
USA 7.5 7.5 4.0 3.0 4.0 3.0
a) Austria
At BÖHLER-UDDEHOLM AG and its Austrian subsidiaries, a defined contribution plan entitles
employees to receive a pension payment on retirement. In the case of defined benefit plans for
management, the pension payment is dependent on the length of service with the company
and/or salary at retirement. Other pension commitments provide for an indexed sum as pension
payment, which is dependent on the length of service. Payment obligations are financed
through a legally independent pension fund, APK Pensionskasse AG (APK) to which the vested
pension obligations are transferred, or through the creation of provisions.
The defined contribution plan, which has also applied to new commitments to key management
since 1 January 1998, provides for ongoing contributions by companies to APK of up to
10% of gross monthly salaries. In addition to the employer’s payment, employees are entitled
to make additional contributions.
b) Germany
The majority of German subsidiaries have defined benefit plans, which are structured in
accordance with local pension laws and established within the framework of company agreements.
Payments are based on the applicable years of service in the form of a fixed amount
per year. In some companies, this fixed amount is modified according to the employee’s income
at retirement. Current pensions are subject to regular adjustment audits in accordance with legal
regulations for indexing.