Südzucker International Finance B. V. Südzucker AG ... - Xetra

1.6 Provision for pensionsPension plans within the Südzucker Group consist mainly of direct benefit plans. Pension benefits are normallygranted based on years of service with the company and benefit-related remuneration.The provisions for pensions have been calculated actuarially using the projected unit credit method and estimatedfuture trends in accordance with IAS 19.A discount rate of 5.5 % was used for the pension plans of domestic companies (between 5.0 % and 5.75 % forforeign companies).An expected annual increase of between 2.5 % and 3.0 % in remuneration and an increase of 1.9 % to 2.0 % inpensions has been assumed for domestic and foreign companies.Pension expense is made up as follows:2002/03 2001/02D millionCurrent service cost 6.8 5.8Interest cost 21.0 19.427.8 25.2There were no expenses or income arising from changes in plan benefits or from actuarial gains or losses.Interest cost has been included in interest expense in the statement of income. Service cost is included underpersonnel expense.A reconciliation of the defined benefit obligation and the provision shown in the consolidated balance sheet isas follows:February 28 2003 2002D millionDefined benefit obligation for direct pension benefits 409.0 382.9Unamortized actuarial gains and losses (38.7) (16.7)Fair value of plan assets (1.2) –Provision for pensions 369.1 366.2F-21