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## Pension and similar reserves 

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The Allianz Group maintains various defined benefit and defined con- tribution pension plans covering its employees worldwide. Allianz Group companies normally have pension plans covering their em- ployees, and in Germany, their agents. In Germany, these plans are primarily based on fixed benefits (defined benefit pension plans), while in other countries there are both defined benefit and defined contribution pension plans. 

Under defined benefit pension plans, the beneficiary is promised a particular level of retirement benefit by the enterprise or by a pen- sion fund, while the premiums payable by the enterprise are not fixed in advance. 

The primary pension fund is Allianz Versorgungskasse VVaG, Mu- nich, which covers most of the employees of Group enterprises in Germany. It is not included in the consolidated financial statements. 

The pension fund assets are invested mainly in equity securities, investment fund units, fixed income securities and registered bonds. The need to recognize actuarial gains or losses is reviewed using the corridor approach for each individual pension plan. 

## Funded status of the main defined benefit pension plans 

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Reductions of the notional interest rate resulted in an increase of the actuarial present value of accrued pension rights by ¤ 325 mn. This increase is only partially compensated by an increase of the inde- pendent pension fund assets, which increases unrecognized losses by ¤ 235 mn. 

The reserve for defined benefit pension plans changed in the year under review as follows: 

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The net periodic benefit cost (expenses minus income) include the following components: 

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Most of the amounts expensed are charged to the income statement of insurance companies as acquisition and administrative expenses, and loss and loss adjustment expenses (claims settlement expenses). Companies in the banking and asset management segment are rec- ognizing these expenses under personnel expenses as part of ad- ministrative expenses. 

The actual income from the pension funds amounted to ¤ 379 mn (2002: loss of ¤ 256 mn). The reserve for other post-retirement obligations was ¤ 366 mn as of December 31, 2003 (2002: ¤ 403 mn). The reserve for other post-retirement obligations is primarily com- posed of obligations for health care benefits in the U.S.A. amounting to ¤ 122 (2002: 148) mn and termination indemnities (e.g. severance pay) in Austria and Italy amounting to ¤ 64 (2002: 65) mn and ¤ 102 (2002: 98) mn, respectively. 

