28. Post-Employment Benefits

The amounts recognized in the balance sheet are determined as follows:

in thousands of EUR

31 December 2015

31 December 2014

Present value of benefit obligation

4,599

169,746

Fair value of plan assets

- 2,505

- 153,591

Net position

2,094

16,155

Present value of unfunded obligation

62,610

69,694

Provision in the balance sheet

64,704

85,849

The most recent actuarial valuations were performed in December 2015.

The funded defined benefit obligation in 2014 relates mainly (over 95%) to the pension plan of the employees in the Netherlands. During 2015, the Group has amended the pension plan in the Netherlands. This resulted in a change of classification from defined benefit to defined contribution. The pension provision for the employee benefit arrangement in the Netherlands is accordingly released in the Income Statement and in Segment reporting presented as a non-recurring gain of €17,667.

The unfunded plans mainly relate to pension arrangement with German employees already employed with Apollo prior to 1994 (2015: €47.0 million; 2014 €51.9 million), the Italian Tratamento di Fine Rapporto program (2015: €5.7 million; 2014: €6.2 million) and an end-of-employment plan for French employees (2015: €9.6 million; 2014: €9.0 million).

The amounts recognized in the Income Statement are as follows:

in thousands of EUR

Notes

2015

2014

Current service costs

4,037

5,253

Interest expense

1,527

1,854

Plan amendments/curtailments/settlements

- 10

-

Administrative costs

6

270

Change of pension plan

- 17,667

-

Total defined benefit costs

8

- 12,107

7,377

The movement in the defined benefit obligation over the year was as follows:

in thousands of EUR

Present value of obligation

Fair value of plan assets

Total

At 1 January 2014

153,076

- 98,435

54,641

Current service costs

5,253

-

5,253

Interest expense/ (income)

5,761

- 3,907

1,854

Acquisitions

4,190

-

4,190

Employee contributions

2,720

- 2,720

-

Employer contributions

-

- 2,908

- 2,908

Experience adjustments

- 1,059

-

- 1,059

Change in financial assumptions

71,286

-

71,286

Change in demographic assumptions

847

-

847

Return on plan assets, excluding amounts in interest

-

- 49,143

- 49,143

Benefits paid

- 3,191

3,191

-

Reclassification

641

269

910

Exchange effect

- 84

62

- 22

At 31 December 2014

239,440

- 153,591

85,849

Current service costs

4,037

-

4,037

Interest expense/ (income)

2,530

- 1,003

1,527

Employee contributions

642

- 642

-

Employer contributions

-

- 3,944

- 3,944

Experience adjustments

1,151

-

1,151

Change in financial assumptions

6,787

-

6,787

Change in demographic assumptions

- 21

-

- 21

Plan amendments and curtailments

- 10

-

- 10

Return on plan assets, excluding amounts in interest

-

- 13,044

- 13,044

Benefits paid

- 2,063

2,063

-

Change of pension plan

- 185,071

167,404

- 17,667

Other

- 6

187

181

Exchange effect

- 207

65

- 142

At 31 December 2015

67,209

- 2,505

64,704

Assumptions

The principal actuarial assumptions used were as follows:

2015

2014

Discount rate

2.6%

2.2%

Expected return on plan assets

7.3%

2.1%

Future salary increases

3.2%

2.9%

Future inflation

1.8%

2.0%

The difference between the discount rate and the expected return on plan assets is caused by the weighted impact of funded and unfunded plans. The percentage on the expected return on plan assets in 2015 originates from Mexico.

The most recent available mortality tables have been used in determining the pension liability. Experience adjustments have been made. The assumptions are based on historical experiences. The expected return on plan assets is based on the expected return on high-quality corporate bonds.

An 1% increase in the discount rate used to calculate the defined benefit obligation would result in 16% decrease in the defined benefit obligation. An increase of 0.25% in salary would result in an increase of 1% in the defined benefit obligation. +1 year in life expectancy would result in a slight increase of 2% in the defined benefit obligation. An increase of 1% in inflation would result in an 11% increase in the defined benefit obligation.

The above sensitivity analyses are based on changing one assumption while all other assumptions remain constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognized within the statement of financial position. 

Plan assets are comprised as follows:

in thousands of EUR

2015

2014

Equities

369

259

Debt instruments

2,136

2,621

Other

-

150,711

Total

2,505

153,591

The plan assets ‘other’ category in 2014 mainly represents the valuation of the pension rights of the Dutch pension plan and would be classified under Level 3 category. In 2015 the plan assets decreased due to the change of plan in the Netherlands. The remaining amount in 2015 represents plan assets in Mexico which using fair value estimation methods would be classified under Level 1 category.

The expected maturity of the undiscounted pension and post-employment benefits is:

in thousands of EUR

2015

2014

Less than 1 year

1,776

3,513

Between 1 and 2 years

2,609

4,037

Between 2 and 5 years

6,796

13,231

Over 5 years

119,537

549,551

Total

130,718

570,332