La banque d'un monde qui change 2004 - BNP Paribas

Consolidated FInancial statementsNOTE 27 (CONT’D)PENSION AND POST-EMPLOYMENT BENEFIT OBLIGATIONSRetirement plans are based on pension rights acquiredwhich are defined using either the employee’s last salaryand the number of years’ service (United Kingdom, Irelandand Canada) or rights to capital acquired each year, expressedas a percentage of annual salary and on which interestis payable at a pre-defined rate (United States).Some plans are supplementary retirement schemes relatedto statutory pensions (Norway).Other plans are wholly funded through insurance companies(Spain and Portugal) or independent fund managers(United Kingdom).The demographic and financial assumptions used to estimatethe discounted present value of benefit obligations andthe estimated yield on plan assets are based on the economicconditions specific to each country or Group company.Unamortised actuarial differences amounted to EUR 76 millionat 31 December 2004, net of EUR 7 million in amortisationfor the year. EUR 101 million are not amortisable,in accordance with the corridor method.Assumptions concerning mortality, employee turnover,and future salaries, as well as discount rates (long-term marketrates) and inflation, take into account economic conditionsspecific to each country or Group company. In France,the 1988-1990 mortality table adapted to the banking industryis used.At 31 December 2004, the discount rate used for France andthe estimated inflation rate are consistent with those used toassess the risks related to additional bank pension benefits.BNP Paribas sets up a provision to cover the charges relatedto the voluntary departure or early retirement of employees,once the voluntary departure or early retirement plan concernedhas been approved or submitted for collective approval.These provisions set up for pensions and other post-retirementbenefit obligations in France and other countries amountedto EUR 1,349 million at 31 December 2004.In recent years, defined benefit plans have been closedto new employees in several countries (United Kingdom,Ireland, Norway, Australia, Germany and Luxembourg).These employees are now offered defined contribution plans.Under defined contribution plans, the company’s obligationconsists primarily of paying a percentage of the beneficiary’ssalary into the pension plan.• Seniority, Post-employment and Other Post-retirementBenefitsEmployees of the various BNP Paribas Group companiesare entitled to collective or contractual seniority and postemploymentbenefits such as retirement and seniority bonuses.In France, BNP Paribas is encouraging voluntary departures andearly retirement among employees who meet certain eligibilitycriteria. Various companies in the BNP Paribas Group have alsoset up defined benefit supplementary pension plans.As a general rule, actuarial valuations of these obligationsare made using a method that takes into account projectedend-of-career salaries (projected unit credit method) in orderto determine the aggregate charge corresponding to benefitsremaining to be paid to early retirees, retirees (if applicable),as well as the vested benefits of active employees.253BNP PARIBAS - ANNUAL REPORT 2004