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Note 19. Employee benefits
Assumptions used in accounting for post-retirement benefits, by country
United States
Canada
2014
2013
2014
2013
Discount rate
3.75%
4.50%
3.75%
4.50%
Rate of compensation increase
3.50%
3.50%
na
na
na: not applicable.
■
■
Allocation of pension plan assets
December 31, 2014 (a)
December 31, 2013
(a)
Equity securities
3%
4%
Debt securities
45%
48%
Diversified funds
36%
31%
Insurance contracts
4%
5%
Real estate
1%
1%
Cash and other
11%
11%
Total
100%
100%
(a)
Pension plan assets are mainly financial assets actively traded in organized financial markets.
Pension plan assets which were not transferred have a limited exposure
to stock market fluctuations. These assets do not include occupied
buildings or assets used by Vivendi nor shares or debt instruments of
Vivendi.
■
■
Cost evolution of post-retirement benefits
For the purpose of measuring post-retirement benefits, Vivendi assumed
the annual growth in the
per capita
cost of covered health care benefits
would slow down from 6.7% for the under 65 years of age and 65 years
of age and older categories in 2014, to 4.5% in 2022 for these categories.
In 2014, a one-percentage-point increase in the assumed cost evolution
rates would have increased post-retirement benefit obligations by
€11 million and the pre-tax expense by €1 million. Conversely, a one-
percentage-point decrease in the assumed cost evolution rates would
have decreased post-retirement benefit obligations by €9 million and the
pre-tax expense by €1 million.
19.2.2.
Analysis of the expense recorded and of the amount of benefits paid
(in millions of euros)
Pension benefits Post-retirement benefits
Total
2014
2013
2014
2013
2014
2013
Current service cost
14
12
-
-
14
12
Past service cost
(a)
(25)
(5)
-
-
(25)
(5)
(Gains)/losses on settlements
-
(7)
-
-
-
(7)
Other
1
1
-
-
1
1
Impact on selling, administrative and general expenses
(10)
1
-
-
(10)
1
Interest cost
25
25
6
6
31
31
Expected return on plan assets
(12)
(13)
-
-
(12)
(13)
Impact on other financial charges and income
13
12
6
6
19
18
Net benefit cost recognized in profit and loss
3
13
6
6
9
19
(a)
The recorded past service cost relates to the change of part of the group’s management team since June 2012.
In 2014, benefits paid amounted to (i) €45 million (compared to
€35 million in 2013) with respect to pensions, of which €18 million
(compared to €9 million in 2013) was paid by pension funds, and
(ii) €9 million (compared to €10 million in 2013) was paid with respect to
post-retirement benefits.
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