The group operates a number of defined benefit plans and defined contribution plans throughout the world, the assets of which are generally held in separately administered funds. The pension plans are generally funded by payments from employees and by the relevant group companies. The group also provides certain additional healthcare benefits to retired employees in the United States.

The charges for pension costs recognized in the income statement (note 5) relate to the following:

For 2009 costs related to pensions and healthcare, excluding gains and losses on curtailments and settlements, will be approximately €70 million higher than the costs for 2008 (€3 million).

Changes in Prepaid pension costs and Employee benefits liabilities recognized in the balance sheet are disclosed in the following overview:

In the Netherlands a prepaid pension asset of €135 million remained at 31 December 2008.

The Employee benefits liabilities of €347 million (2007: €282 million) consist of €291 million (2007: €229 million)related to pension plans, €36 million (2007: €33 million) related to healthcare and other costs and €20 million (2007: €20 million) related to post-employment benefits.

The DSM group companies have various pension plans, which are geared to the local regulations and practices in the countries in which they operate. As these plans are designed to comply with the statutory framework, tax legislation, local customs and economic situation of the countries concerned, it follows that the nature of the plans varies from country to country. The plans are based on local legal and contractual obligations.

Defined benefit plans are applicable to certain employees in the Netherlands, Germany, the United Kingdom, Switzerland, the United States and Austria. The rights that can be derived from these plans are based primarily on length of service and the majority of the plans are based on final salary. The majority of the obligations are funded and have been transferred to independent pension funds and life-insurance companies.
The German and the Austrian plan are wholly unfunded. Together they represent 4% of the total defined benefit obligation.

Post-employment benefits relate to obligations that will be settled in the future and require assumptions to project benefit obligations and fair values of plan assets. Post-employment benefit accounting is intended to reflect the recognition of post-employment benefits over the employee’s approximate service period, based on the terms of the plans and the investment and funding. The accounting requires management to make assumptions regarding variables such as discount rate, future salary increases, return on assets, and future healthcare costs. Management consults with external actuaries regarding these assumptions at least annually for significant plans. Changes in these key assumptions can have a significant impact on the projected defined benefit obligations, funding requirements and periodic costs incurred.

The changes in the present value of the defined benefit obligations and in the fair value of plan assets of the major plans are listed below:

The amounts recognized in the balance sheet are as follows:

The changes in the net assets recognized in the balance sheet are as follows:

In 2009 DSM is expected to contribute €111 million (actual 2008: €92 million) to its defined benefit plans.

The major categories of pension-plan assets as a percentage of total plan assets are as follows:

The pension-plan assets do not include ordinary DSM shares nor property occupied by DSM.

The total expense recognized in the income statement is as follows:

The main actuarial assumptions for the year (weighted averages) are:

The assumptions for the expected return on plan assets are based on a review of historical returns of the asset classes in which the assets of the pension plans are invested and the expected long-term allocation of the assets over these classes.

Year-end amounts for the current and previous periods are as follows:

In some countries, particularly in the United States, group companies provide retired employees and their surviving dependants with post-employment benefits other than pensions, mainly allowances for healthcare expenses and life-insurance premiums. Some of these are unfunded; in these cases, approved expense claims are reimbursed out of the financial resources of the group companies concerned.

The amounts included in the balance sheet are as follows:

The amounts recognized in the income statement are as follows:

The changes in the net liability for post-employment healthcare and other costs recognized in the balance sheet (provision for post-employment benefits) can be shown as follows:

In 2009 DSM is expected to contribute €1 million to its post-employment healthcare and other plans.

The main actuarial assumptions for post-employment healthcare costs (weighted averages) for the year are:

A one-percentage-point change in assumed healthcare cost trend rates would have the following impact:

Amounts for the current and previous periods are as follows: