- Extraordinary pension contribution of €2.5 billion to German pension fund
- Investment in the future and to safeguard employees’ retirement provision
Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “With this allocation to the German pension funds, we want to give our employees more security for their future planning. At the same time, we are investing in the future of the company.”
The Supervisory Board of Daimler AG today decided on an extraordinary contribution to the pension fund of €2.5 billion, split proportionately between the Daimler AG, EvoBus and the Daimler Financial Services companies.
Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “It is very important to us that we safeguard our employees’ pension entitlements with the pension fund in the long-term. Because without their commitment and hard work, the company would not be as successful as it is. With this allocation to the German pension fund, we want to give our employees more security for their future planning. At the same time, we are investing in the future of the company.”
Michael Brecht, Chairman of the General Works Council and Deputy Chairman of the Supervisory Board of Daimler AG: „For our colleagues the security of their jobs and their pensions are of major importance. Therefore the funding is a good and accurate step to additionally assure the pension fund.“
The allocation of €2.5 billion to the Daimler Group’s pension fund will have a positive impact on interest income and thus on net profit in the coming years, but it will not affect Group EBIT. The allocation will also improve the equity structure of the industrial business. The extraordinary contribution to the pension fund will reduce the net liquidity of the industrial business respectively. At the end of the third quarter, the net liquidity of the industrial business was €17.9 billion, which is €4.1 more than at the end of 2013.
Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services: “This allocation to the pension fund significantly increases the funded ratio of our pension obligations. It strenghtens the pension fund, so that we can guarantee the rising pension payments in the future.”
Including this allocation the Group has paid more than €7.4 billion into the Group’s pension fund since the beginning of 2010. The sharp drop in the interest level and therefore in discount rates since 2011 have led to a significant increase in pension obligations and have reduced the positive effect of payments into the pension plans. With the contribution that has now been decided upon, the company is further safeguarding the pension rights of entitled employees at Daimler AG, EvoBus GmbH and the Daimler Financial Services companies in Germany with pension assets funded by long-term investments. This significantly reduces the underfunded status of the pension plan as of the end of 2014. The underfunding of the pension plan is primarily the result of the ongoing low level of interest rates.
