Plastic Omnium - 2020 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS 2020 Consolidated financial statements at December 31, 2020 www.plasticomnium.com PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 238 Provisions for pensions and other post-employment 5.2.5 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, social benefits relate to supplementary pension plans only for Executive Corporate Officers and end-of-career benefits (“IFC”). Supplementary pension plans, when they related to the other geographical regions, concern all employees. Plans for the payment of healthcare costs mainly concern North America region (United States) Other long-term employee benefits Other long-term employee benefits cover long-service awards and other 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 does not enable an average to be calculated. Similarly, sensitivity tests are carried out on significant, homogeneous data by and region. ACTUARIAL ASSUMPTIONS 5.2.5.1 The decrease in interest rates in 2020 led the Group to revalue its employee-related commitments for the Euro zone and the United States. The rates used at December 31, 2020 were respectively: 0.35% for the Euro zone (0.75% at December 31, 2019); ● 2.46% for the United States (3.2% at December 31, 2019). ● In 2019, the Group opted for a “defined contribution” plan for the only American. subsidiary that operated a “defined-benefit” plan (see Notes 4.6 “Other operating income and expenses” and 5.2.4 “Provisions” in the Consolidated Statements as of December 31, 2019). The main actuarial assumptions used to value post-retirement and long-term benefits are the following: December 31, 2020 December 31, 2019 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 0.35% 2.46% 0.75% 3.20% Discount rate – long-service awards 0.25% 0.30% Inflation rate 1.70% 2.00% 1.70% 2.00% Rate of future salary increases 2.70% 3.50% 2.70% 3.50% Rate of increas in healthcare costs For those under 65 years old 8.00% 8.00% For those over 65 years old 5.50% 5.50% Expected long-term rate of return on pension plan assets 0.35% 2.46% 0.75% 3.20% Annual discount rate 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-managers” and the age of employees. 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.