Pensions and Other Post-Employment Benefits

 (unaudited)

 

Three months ended

Six months ended

in € m.

Jun 30, 2013

Jun 30, 2012

Jun 30, 2013

Jun 30, 2012

Service cost for defined benefit plans:

 

 

 

 

Germany

43

35

90

74

UK

8

5

14

12

Other countries

15

24

34

46

Total service cost

66

64

138

132

Net interest cost (income) for defined benefit plans:

 

 

 

 

Germany

7

11

20

20

UK

(8)

(9)

(15)

(19)

Other countries

4

2

8

6

Total net interest cost (income)

3

4

13

7

Total expenses defined benefit plans:

 

 

 

 

Germany

50

46

110

94

UK

0

(4)

(1)

(7)

Other countries

19

26

42

52

Total expenses defined benefit plans

69

68

151

139

Total expenses for defined contribution plans

86

94

196

200

Total expenses for post-employment benefits

156

162

346

339

 

 

 

 

 

Employer contributions to mandatory German social security pension plan

55

56

115

118

The Group expects to pay approximately € 125 million in regular contributions to its retirement benefit plans in 2013. Furthermore the Group made additional contributions of € 819 million and € 53 million to fund the majority of Postbank’s unfunded defined benefit obligations in the first and second quarter of 2013, respectively. It is not expected that any plan assets will be returned to the Group during the year ending December 31, 2013.

A remeasurement loss of € 441 million pre-tax recognized in the Consolidated Statement of Comprehensive Income in the second quarter was largely driven by the fact that the eurozone discount rate did not capture the recent increase in market yields of corporate bonds due to new low yielding bond issuances and downgrading of existing bonds. Various assumptions in the determination of the discount rate are impractical to be hedged mainly due to the absence of ultra-long-term corporate bonds. In addition, certain bonds within the plan assets provided a relative underperformance compared to the assumed development in pension obligation resulting from movements in corporate bond yields. The discount rate applied to determine the defined benefit pension obligations in the eurozone as of June 30, 2013 is 3.5 %.