Pharmaceuticals Sector - Solvay

84
Solvay Global Annual Report 2005
The fi nancing defi cit in our post-employment benefi t plans for former employees (total obligations less the value of
the assets) increased by EUR 25 million.
Our commitments have risen by EUR 208 million. EUR 120 million of this increase refl ects a lowering at the end of
December 2004 of the discount rate used in valuing commitments in the Eurozone, the United States and the United
Kingdom. On the other hand, the good returns on invested assets, new contributions to our pension funds and a
change of plan in the Netherlands enabled us to contain the defi cit.
The net obligation recorded in the balance sheet includes the obligation to retired executive directors and surviving
spouses; the amounts paid to the latter amounting to EUR 1.3 million in 2005.
Changes in net obligations during the period:
EUR million 2004 2005
Net amount recognized at beginning of period 1 003 988
Net expense - Defi ned benefi t plans 99 76
Company contributions / direct benefi t payments (cash payments) -105 -131
Impact of acquisitions / disposals -3 8
Changes in consolidation scope 2 -1
Currency translation differences -9 17
Other 1 -1
Net amount recognized at end of period 988 956
Actuarial assumptions used in determining the pension obligation at December 31
Eurozone Europe Other USA Other
2004 2005 2004 2005 2004 2005 2004 2005
Discount rates 5% 4.5% 3.5% - 7% 3.5% - 7% 6.0% 5.75% 11.3% 11.3%
Expected rates
of future salary
increases
2.5% - 4.75% 2.5% - 4.75% 2% - 6% 2% - 5% 4% 4% 8% 8%
Expected rates of
pension growth
Expected rates of
medical care cost
increases
0% - 2% 0% - 2% 0% - 3% 0% - 2.7% NA NA NA NA
2% - 3% 2% NA NA 5% - 9% 5% - 9% 6.6% 6.6%