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Allianz Annual Report 2012

For the AVK the annual minimum interest rate guaranteed is 1.75 %-3.50 % depending on the date of joining the ­Allianz Group and for the BPV it is 2.75 %. The period in which a retirement pension can be drawn is usually between age 60 and age 67. Disability benefits are granted prior to retirement in the event of an occurrence of a qualifying disability. In the case of death, a pension may be paid to dependents. Surviving dependents normally receive 60 % (widow/wid- ower) and 20 % (per child) of the original employee’s pen- sion, in total not to exceed 100 %. Defined benefit plans Amounts recognized in the ­­­Allianz Group’s consolidated balance sheets for defined benefit plans are as follows: Reconciliation Defined Benefit Plans Balance Sheet D 130 € mn as of 31 December 2012 2011 Net amount recognized as of 1 January 3,369 3,553 Changes in the consolidated subsidiaries of the ­­­­Allianz Group 1 28 (216) Foreign currency translation adjustments 3 (3) Expenses 614 622 Payments (652) (587) Net amount recognized as of 31 December 3,362 3,369 thereof assets (490) (385) thereof liabilities 3,852 3,754 1 For 2011, the amount consists of the defined benefit liability of the deconsolidated subsidiary manroland AG with an amount of € 197 mn. 47 – Pensions and similar obligations Retirement benefits in the ­Allianz Group, which are grant- ed 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 de- fined benefit by the employer or via an external entity. In contrast to defined contribution arrangements, 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 retirement 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 biomet- ric risks like longevity, disability and death as well as eco- nomic risks like interest rates, inflation and compensation increases. In order to decrease the risk impact the ­Allianz Group has established new pension plans in some of the important regional companies including those in Germa- ny, the U.S., Ireland, Italy and the U.K. over the last several years. These new plans are primarily based on contribu- tions and may include in some cases guarantees like pres- ervation of contributions or minimum interest rate. Some are still risk exposed, but only to a minor extent. Most active German employees participate in a contribu- tion-based system using different vehicles to cover the base salary both below and above the German social secu- rity ceiling. The ­Allianz Versorgungskasse VVaG (AVK) fi- nanced through employee contributions and the ­Allianz Pensionsverein e.V. (APV) financed by the employer, pro- vide pension benefits for the base salary up to the German social security ceiling. Additionally, for salary above the German social security ceiling, ­Allianz Group contributes to the Beitragsorienti- erter Pensionsvertrag (BPV). On retirement the accumu- lated capital is converted to a lifetime annuity. ­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 disabil- ity. The BPV was implemented as of 1 January 2005. Former- ly existing plans were transferred to the BPV, taking the re- tained rights into account as appropriate. Annual Report 2012    Allianz Group D Consolidated Financial Statements 219 Consolidated Balance Sheets 220 Consolidated Income Statements 221 Consolidated Statements of Comprehensive Income 222 Consolidated Statements of Changes in Equity 223 Consolidated Statements of Cash Flows 226 Notes to the Consolidated Financial Statements 341