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Allianz Annual Report 2013

Annual Report 2013    Allianz Group222 47 – Pensions and similar obligations Overview Retirement benefits in the ­Allianz Group, which are granted to employees and in Germany also to agents, are either in the form of defined benefit or defined contribution plans. For defined benefit plans, the beneficiary is granted a defined benefit by the employer or via an external entity. In contrast to defined contribution arrange- ments, the future cost to the employer of a defined benefit plan is not known with certainty in advance. The ­Allianz Group provides competitive and cost effective retire- ment and disability benefits using risk appropriate vehicles. The plans may vary from country to country due to the different legal, fiscal and economic environment. Typically associated with defined benefit plans are biometric risks like longevity, disability and death as well as economic risks like interest rates, inflation and compensation increases. The ­Allianz Group continued to mitigate the risk impact by reviewing the benefit rules. New plans are primarily based on contributions and may include in some cases guarantees like preservation of contributions or minimum interest rate. The ­Allianz Group established a Pension Task Force to foster global governance. The heads of Group HR, Group Accounting and Reporting, Group Treasury and Corporate Finance, Group Planning and Controlling, Group Risk and AIM are members of the Pension Task Forcewhichmeetsquarterly.Thisbodypre-alignsallpension-related topics prior to relevant Group Committee meetings. Pension plans in Germany, the U.K. and Switzerland are described in more detail regarding key risks and regulatory environ- ment, as each of them contributes more than 5 % to the ­Allianz Group’s defined benefit obligation. Germany Germany accounts for 73.8 % of the ­Allianz Group’s defined benefit obligation and 62.3 % of the ­Allianz Group’s plan assets. Most active German employees participate in a contribution- based system using different vehicles to cover the base salary both below and above the German social security ceiling. The ­Allianz Ver- sorgungskasse VVaG (AVK) financed through employee contributions and the ­Allianz Pensionsverein e.V. (APV) financed by the employer, provide pension benefits for the base salary up to the German social security ceiling. Both plans are wholly funded. AVK is subject to Ger- man insurance regulation. Additionally, for salary above the German social security ceiling, the ­Allianz Group contributes to the Beitragsorientierter Pensions- vertrag (BPV). On retirement the accumulated capital is converted to a lifetime annuity. The ­Allianz Group decides each year whether and to which extent a BPV budget is provided. Independently from this decision an additional risk premium is paid to cover death and dis- ability. The BPV was implemented as of 1 January 2005. Formerly exist- ing plans were transferred to the BPV, taking the retained rights into Performance guarantees Performance guarantees are given by the ­Allianz Group to ensure third-party entitlements if certain performance obligations of the guarantee recipient are not fulfilled. Credit derivatives Credit derivatives consist of credit default swaps, which require pay- ment in the event of default of debt obligations, as well as of total return swaps, under which the performance of underlying assets is guaranteed. The notional principal amounts and fair values of the ­Allianz Group’s credit derivative positions as of 31 December2012 are provided in note 43. Assets pledged and collateral The carrying amounts of the assets pledged as collateral are dis- played in the following table: Assets pledged as collateral € mn as of 31 December 2013 2012 Collaterals without right to resell or repledge Financial assets carried at fair value through income 3 – Investments 4,034 1,452 Loans and advances to banks and customers 2,941 2,811 Subtotal 6,978 4,263 Collaterals with right to resell or repledge Investments 2,112 2,460 Subtotal 2,112 2,460 Total 9,090 6,723 As of 31 December 2013, the ­Allianz Group has received collateral, consisting of fixed income and equity securities, with a fair value of € 2,170 mn (2012: € 931 mn), which the ­Allianz Group has the right to sell or repledge. For the years ended 31 December 2013 and 2012, no pre­ viously received collateral was sold or repledged by the ­Allianz Group. As of 31 December 2013, the ­Allianz Group received cash collat- eral with a carrying amount of € 191 mn (2012: € 65 mn).

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