23 Pensions and other post-employment benefits (continued)
Ahold Annual Report 2012 114
Ahold at a glance
Our strategy
Our performance
Governance
Financials
Investors
Notes to the consolidated
financial statements
The assumptions required to calculate the actuarial present value of benefit obligations and net defined benefit costs are determined per plan. The key assumptions are as follows (expressed
as weighted averages):
Percent
2012
The Netherlands
2011
2012
United States
2011
Discount rate for obligations
3.6
5.4
4.2
5.2
Expected return on plan assets
5.2
5.9
6.6
7.1
Future salary increases
4.2
3.9
5.0
5.0
The discount rates used to calculate the present value of the obligations are based on the market yields on high-quality corporate bonds (i.e. bonds rated AA) with the same currency and term
as the obligations.
The following table shows the effect on the defined benefit obligations and on net defined benefit cost if the discount rate had been 0.5 percentage-points higher or lower as of year-end 2012.
Positive amounts represent increases and negative amounts represent decreases in defined benefit obligations and net defined benefit cost:
million
The Netherlands
United States
Total
0.5 percentage-point increase
Defined benefit obligations at year-end 2012
(352)
(82)
(434)
Net defined benefit cost 2013
(31)
5
(26)
0.5 percentage-point decrease
Defined benefit obligations at year-end 2012
412
92
504
Net defined benefit cost 2013
34
(7)
27
The expected return on plan assets is determined as a weighted-average rate of return based on the current and projected investment portfolio mix of each plan, taking into account the
corresponding long-term yields for the separate asset categories, which depend on components such as the risk-free rate of return in real terms, expected inflation and expected risk and
liquidity premiums. In addition, actual long-term historical return information is taken into account. The actual return on plan assets in 2012 was 12.8% for the Dutch plans (201 19.5%) and
10.2% for the U.S. plans (20115.1%).
The assumed medical cost trend rates used in measuring the defined benefit obligations related to medical care plans were 8.0% in 2012 and 8.5% in 2011declining to an ultimate trend
rate of 5.0% as of 2019. Because of the limited size of Ahold's medical care plans, the impact of a 1.0 percentage-point increase or decrease in assumed medical cost trend rates on the
defined benefit obligations and net defined benefit cost would be negligible.
Plan assets
The pension plan asset allocation differs per plan. On a weighted average basis, the allocation was as follows:
Percent
2012
The Netherlands
2011
2012
United States
2011
Equity securities
21
22
40
32
Debt securities
58
56
44
59
Real estate
7
14
2
2
Other
14
8
14
7
Total
100
100
100
100
