In Switzerland, plans for the Group’s employees and former employees (2,897 people at 31 December 2023, of which over 90% are active) are “cash balance” pension plans that guarantee their members a minimum return on their contributions. They provide benefits in the event of death or disability, along with a pension when members stop working. These plans are open to new members. Their duration is around 12 years.• For German subsidiaries, there are several internal plans within the Group, including plans implemented as direct pension promises (Direktzusagen). These plans provide members with pensions or death and disability benefits. At 31 December 2023, 8,701 individuals were covered by the plans, including 5,324 retirees, 2,113 people working for Group subsidiaries and 1,264 people who were generally still working but no longer working for the Group. Most of these plans were closed to new members at 31 December 2023. Their average duration is 10 years.
Commitments relating to lump sum payments on retirement for manual construction workers in France, which are met by contributions to an outside multi-employer insurance fund (CNPO), are considered as being under defined contribution plans and are therefore recognised as an expense as and when contributions are payable.
The main retirement benefit obligations covered by provisions recognised in the balance sheet are calculated using the following assumptions:
| non-inclus | Eurozone | United Kingdom | Switzerland | |||
|---|---|---|---|---|---|---|
| Assumptions | 31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 |
| Discount rate | 3.20% | 3.25% | 4.60% - 4.65% | 4.65% - 4.75% | 1.85% | 2.05% |
| Inflation rate | 2.00% | 2.00% | 2.30% - 2.55%(*) | 2.25% - 2.55%(*) | 1.20% | 1.10% |
| 3.10% - 3.15%(**) | 3.05% - 3.15%(**) | |||||
| Rate of salary increases | 2.10% - 4.40% | 2.10% - 4.40% | 1.50% - 3.40% | 1.00% - 3.65% | 1.70% | 1.60% |
| Rate of pension increases | 1.50% - 2.00% | 2.00% | 2.53% - 3.70% | 2.76% - 3.85% | n/a | n/a |
(*) CPI.
(**) RPI.
Discount rates have been determined by geographical area on the basis of the yields on private sector bonds with a rating of AA and whose maturities correspond to the plans’ expected cash flow.
The other local actuarial assumptions (economic and demographic assumptions) are set on the basis of the specific features of each of the countries in question. Plan assets are valued at their fair value at 31 December 2023. The book value at 31 December 2023 is used for assets invested with insurance companies.
On the basis of the actuarial assumptions referred to above, details of the retirement benefit obligations, provisions recognised in the balance sheet, and the retirement benefit expenses recognised in 2023 are provided below.
| non-inclus | 31/12/2023 | 31/12/2022 | |||||
|---|---|---|---|---|---|---|---|
| (in € millions) | Lump sums paid on retirement in France | Pensions, supplementary pensions and other | Total | Lump sums paid on retirement in France | Pensions, supplementary pensions and other | Total | |
| Actuarial liability from retirement benefit obligations | 646 | 2,197 | 2,843 | 641 | 2,116 | 2,757 | |
| Plan assets at fair value | 28 | 1,858 | 1,887 | 34 | 1,882 | 1,916 | |
| Deficit (or surplus) | 618 | 339 | 957 | 607 | 234 | 841 | |
| Provision recognised under liabilities on the balance sheet | I | 618 | 529 | 1,148 | 607 | 510 | 1,117 |
| Overfunded plans recognised under assets on the balance sheet | II | - | 96 | 96 | - | 178 | 178 |
| Asset ceiling effect (IFRIC 14) (*) | III | - | 95 | 95 | - | 98 | 98 |
| Total | I − II − III | 618 | 339 | 957 | 607 | 234 | 841 |
(*) Effect of asset ceiling rules and minimum funding requirements.
Overall, the proportion of obligations relating to retired beneficiaries was around 35% of the total actuarial liability from retirement benefit obligations at 31 December 2023.
