Plastic Omnium - 2018 Registration Document

4 2018 CONSOLIDATED FINANCIAL STATEMENTS Consolidated financial statements at December 31, 2018 PLASTIC OMNIUM 2018 REGISTRATION DOCUMENT 193 Provisions for pensions and other post-employment 5.2.6 benefits Post-employment benefits The generic term “post-employment benefits” covers both pension and other employee benefits. Provisions for pensions Provisions for pensions mainly concern: end of career benefits; ● supplementary pension plans; and ● healthcare coverage plans. ● In France, supplementary pension plans only concern executive directors and consist end of career benefits (IFC). Supplementary pension plans, when they affect the other geographical regions, concern all employees. Plans for the payment of healthcare costs mainly concern North America Zone (United States). Other long-term employee benefits Other long-term employee benefits cover long-service awards and other long-service awards within the Group. Post-employment benefit plans are subject to the regulations applicable in each country. The benefits recognized in the financial statements are therefore not a function of the number of employees by region. The regions identified and presented are those for which the regulations are consistent allowing data to be aggregated. Where no such aggregation is possible, no reference actuarial rate is given as a discrepancy in the parameters is too great to calculate an average. Similarly, sensitivity tests are carried out on significant, homogeneous and regional data. ACTUARIAL ASSUMPTIONS 5.2.6.1 The main actuarial assumptions used to value post-retirement and long-term benefits are the following: December 31, 2018 December 31, 2017 France United States France United States Managers and non-managers Managers and non-managers Minimum age for receiving a full pension 60-62 years 65 years 60-62 years 65 years Age from which no reduction applies 65-67 years 65-67 years Discount rate – post-employment benefits 1.60% 4.25% 1.60% 3.75% Discount rate – length-of-service awards 1.30% 1.10% Inflation rate 1.70% 1.70% Rate of future salary increases 2.70% 3.50% 2.70% 3.50% Rate of growth in healthcare costs 8.25% 7.50% Expected long-term rate of return on pension plan assets 1.60% 4.25% 1.00% 3.75% Annual rate of discounting of post-employment benefits The Group uses, as a reference, the rate of bonds issued by good quality (AA) commercial and industrial companies and with maturity equal to the length of the commitment being valued. Inflation rates In France, benefits are linked to inflation rates. The impact of inflation rates is not material in the United States. Average rate of future salary increases The average rates of future salary increases are weighted between “managers” and “non-executive” staff and the age of employees. The expected long-term return on pension plan assets These rates are based on long-term market forecasts and take account of each plan’s asset allocation. For other foreign subsidiaries, rate differentials are determined based on local conditions.