Other liabilities

Other provisions

The main changes occurred in the period are summarized in the table below:

Provisions for defined benefit plan

The pension benefits of Generali Group’s employees are mainly in form of defined benefit plans and defined contribution plans.

As for defined benefit plans, participants are granted a defined pension benefits by the employers or via external entities.

The main defined benefits plans are concentrated in Germany, Austria and Switzerland, while in Italy the provision for Trattamento di fine rapporto (employee severance pay) matured until 1st January 2007 is included in the provisions for defined benefit plan.

The funded status arising from the application of IAS 19 increased from € 2,870.2 as at 31 December 2010 million to € 3,056.8 million as at 31 December 2011.

The increase was mainly due to the increase of the present value of the defined benefit plan obligations, following the reduction of the discount rate applied in the “Project Unit Credit Method”⁽¹⁾ valuation.

⁽¹⁾ Refer to Assicurazioni Generali, Annual Report 2010, Basis for Presentation and Accounting Principles.

For many of the Group’s defined benefit plans there are assets that are designated, but not legally segregated, to meet the pension defined benefit obligations. These are investments related to insurance policies issued by Generali Group insurers, or other investments owned by the Group entities. Consequently, in accordance with IAS 19 these are not recognised as plan assets and so cannot be deducted from the defined benefit obligations. However, to obtain the economic net liability for defined benefit plans these assets would have to be netted against the present value of the related pension obligations.

This is predominantly for Germany and Austria, where the Group retains about the 60% of the present value of defined benefit obligations. Moreover, in these countries, the pension guarantee associations,  to the extent of the yearly contributions paid by the companies, are liable for the fulfilment of the pension commitments granted in case of companies insolvency.