Page 42 - KELAG Annual Report 2017
P. 42

Pensions                                         9.85             9.75
            Defined benefit plans and pension-related obligations   17.14    17.41
            Severance payment obligations                    9.02             9.38
            Long-service awards                              8.74             8.55
            “Altersteilzeit” (special phased retirement scheme)   2.02        2.08

           The cost of defined benefit plans and the present value of the pension obligation are determined
           using actuarial valuations. An actuarial valuation involves making various assumptions that can
           differ from actual developments in the future. These include the determination of the discount
           rate, future salary increases, mortality rates and future pension increases. Due to the complexity
           of  the  valuation,  the  underlying  assumptions  and  its  long-term  nature,  a  defined  benefit
           obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at
           each reporting date.

           The  provision  for  long-service  awards  is  recognised  in  accordance  with  the  same  actuarial
           assumptions as the provision for severance obligations. With the exception of the discount rate,
           these assumptions also apply for the recognition of phased retirement obligations. Due to their
           short duration, the phased retirement obligations are discounted at a rate of -0.03% (prior year:

           Uncertainties also exist with respect to the interpretation of complex tax regulations, changes in
           tax  laws,  and  the  amount  and  timing  of  future  taxable  income.  Given  the  wide  range  of
           international  business  relationships  and  the  long-term  nature  and  complexity  of  existing
           contractual  agreements,  differences  arising  between  the  actual  results  and  the  assumptions
           made, or future changes to such assumptions, could necessitate future adjustments to tax income
           and expense already recorded.

           Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that
           taxable income will be available against which the losses can be utilised. Significant management
           judgement is required to determine the amount of deferred tax assets that can be recognised,
           based upon the likely timing and the level of future taxable income together with future tax
           planning strategies (see Note 16).

           The  contingent  liabilities  not  recorded  in  the  consolidated  statement  of  financial  position  of
           EUR 8.1m  (prior  year:  EUR 8.1m)  are  regularly  assessed  in  relation  to  their  probability  of
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