GERMANY – Industrial giant ThyssenKrupp says half of its employees have chosen to switch from its traditional company pension scheme into the groupwide defined contribution plan.

“We continued to pursue our company strategy of successively converting existing schemes from defined benefit to defined contribution plans and from annuity to lump sum payments,” the Düsseldorf-based company said in its new annual report.

“The optional changeover has been well received, with one out of two employees electing to switch from the traditional company pension scheme to the groupwide defined contribution pension plan.”

All new staff have been enrolled in DC plans since 1998.

The comments came is it revealed that its accrued pensions and similar obligations rose by €851m to €8.1bn in the period.

“This increase resulted from the dramatic drop of the discount rate in all relevant currency zones,” the firm said.

ThyssenKrupp has cut the assumed discount rate to determine benefit obligations on its funded plans to 5.04% as of the end of September this year – from 6.07% a year before. The unfunded assumption has been cut to 3.95% from 5.42%.

In 2003 the company was engaged in a public row with Standard & Poor’s after the rating agency put it and a number of other European industrial firms on watch over their pension liabilities. At the time ThyssenKrupp’s liabilities were €7.1bn.

A few days ago S&P revised its outlook on the firm to negative after the company made a €4.1bn takeover offer for Dofasco.