GERMANY - Listed companies in Germany have "successfully" prevented growing liabilities from hitting funding levels at their pension schemes, according to Mercer.

In 2011, both liabilities and assets at the 30 largest companies listed in the German stock index (DAX) increased by 4%, which means funding levels remained stable at 66%.

The return on investments added around €5bn to the assets, which increased from €165bn in 2010 to €170bn last year.

Herwig Kinzer, head of investment consulting at Mercer for Germany, Austria and Switzerland, said: "Despite an adverse market environment, companies achieved a good investment return, while calculations at the beginning of the year had predicted a slightly negative return."

The increase in liabilities to €257bn from €248bn the year before was down to a further reduction in the discount rate, or Rechnungszins, as well as one-off effects from currency conversions, according to Stephan Oecking, partner at Mercer Germany.

The discount rate has had to be adjusted annually from its 6% level in 2008 and now ranges between 4.3% and 5.3%, depending on a given company's estimates.
Mercer warned that new capital requirements for pension funds currently under consideration in Brussels were "threatening to unnecessarily increase costs of retirement provision".

The consultancy noted that its preliminary assessment of DAX pension schemes was an extrapolation based on 22 already published annual reports.

The companies' pension assets make up more than 80% of the total in the DAX30, including Adidas, BASF, Bayer, Beiersdorf, BMW, Daimler, Deutsche Lufthansa, Deutsche Post, Deutsche Telekom, EON, HeidelbergCement, Henkel, Infineon Technologies, K&S, Linde, MAN, Merck, Münchner Rück, RWE, Siemens, ThyssenKrupp and Volkswagen.