2018 Registration document and annual fi nancial report - BNP PARIBAS236
4 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
4
Notes to the fi nancial statements
7.b POST-EMPLOYMENT BENEFITS IAS 19 distinguishes between two categories of plans, each handled differently depending on the risk incurred by the entity. When the entity is committed to paying a fi xed amount, stated as a percentage of the benefi ciary s annual salary, for example, to an external entity handling payment of the benefi ts based on the assets available for each plan member, it is described as a defi ned-contribution plan. Conversely, when the entity s obligation is to manage the fi nancial assets funded through the collection of contributions from employees and to bear the cost of benefi ts itself or to guarantee the fi nal amount subject to future events, it is described as a defi ned-benefi t plan. The same applies, if the entity entrusts management of the collection of premiums and payment of benefi ts to a separate entity, but retains the risk arising from management of the assets and/or from future changes in the benefi ts.
Defined-contribution pension plans for Group entities
The BNP Paribas Group has implemented over the past few years a wide campaign of converting defi ned-benefi t plans into defi ned-contribution plans.
Thus, in France, the BNP Paribas Group pays contributions to various nationwide basic and top-up pension schemes. BNP Paribas SA and certain subsidiaries have set up a funded pension plan under a company- wide agreement. Under this plan, employees will receive an annuity on retirement in addition to the pension paid by nationwide schemes.
Since defi ned-benefi t plans have been closed to new employees in most countries outside France, they are offered the benefi t of joining defi ned- contribution pension plans.
The amount paid into defi ned-contribution post-employment plans in the year ended 31 December 2018 was EUR 612 million, compared with EUR 616 million in the year ended 31 December 2017.
The breakdown by major contributors is determined as follows:
Contribution amount In millions of euros Year to 31 Dec. 2018 Year to 31 Dec. 2017
France 334 315
Italy 63 60
UK 50 48
USA 40 45
Germany 4 8
Turkey 30 38
Others 91 102
TOTAL 612 616
Note 7 SALARIES AND EMPLOYEE BENEFITS
In millions of euros Year to 31 Dec. 2018 Year to 31 Dec. 2017
Fixed and variable remuneration, incentive bonuses and profi t-sharing 12,403 12,402
Employee benefi t expense 3,665 3,542
Payroll taxes 549 552
TOTAL SALARY AND EMPLOYEE BENEFIT EXPENSE 16,617 16,496
7.a SALARY AND EMPLOYEE BENEFIT EXPENSE
In Italy, the plan introduced by BNL is funded by employer contributions (4,2% of salaries) and employee contributions (2% of salaries). Employees can also make additional voluntary contributions.
In the United Kingdom, the employer contributes 12% of salaries for the majority of employees; employees can make additional voluntary contributions.
In the US, the bank matches the voluntary contributions made by employees, within certain limits.
Main defined-benefit pension plans for Group entities, of which indemnities payable on retirement
Defined-benefit plans In Belgium, BNP Paribas Fortis funds a defi ned-benefi t plan, based on fi nal salary and number of years of service, for its management and employees who joined the bank before its pension plans were harmonised on 1 January 2002. Actuarial liabilities under this scheme are pre-funded at 92% at 31 December 2018 (compared with 90% at 31 December 2017) through AG Insurance, in which the BNP Paribas Group owns a 25% equity interest.
