BASF Report 2021 Consoli dated Financial Statements – Notes 257 Sensitivity analysis Explanation of the amounts in the statement of income and Development of defined benefit obligations balance sheet Million € A change in the material actuarial assumptions would have the 2021 2020 following effects on the defined benefit obligation: Composition of expenses for pension benefits Defined benefit obligation as of January 1 29,840 28,423 Million € Current service cost 419 419 Sensitivity of the defined benefit obligation as of December 31 2021 2020 Past service cost 1 6 Million € Expenses for defined benefit plans 423 430 Increase by 0.5 percentage Decrease by 0.5 percentage Plan settlements –21 –60 points points Expenses for defined contribution plans 308 306 Interest cost 276 395 2021 2020 2021 2020 Expenses for pension benefits (recognized in income 731 736 from operations) Benefits paid –1,084 –1,095 Discount rate –2,115 –2,221 2,420 2,553 Employee contributions 37 41 Projected pension 1,533 1,666 –1,267 –1,411 Net interest expense from underfunded pension plans and Actuarial gains/losses –1,496 2,131 increase similar obligations 85 108 of which adjustments relating to financial assumptions –1,505 2,106 Net interest income from overfunded pension plans –3 0 adjustments relating to demographic An alternative valuation of the defined benefit obligation was Expenses for pension benefits (recognized in the assumptions –117 8 financial result) 82 108 performed to determine how changes in the underlying assumptions experience adjustments 126 17 influence the amount of the defined benefit obligation. A linear Effects from acquisitions and divestitures 171 54 extrapolation of these amounts based on alternative changes in the The interest on the net defined benefit liability at the beginning of the Other changes –19 –4 assumptions as well as an addition of combined changes in the year is recognized in the financial result. This is the difference individual assumptions is not possible. between the interest cost of the defined benefit obligation and the Currency effects 505 –470 standardized return on plan assets as well as the interest cost for Defined benefit obligation as of December 31 28,629 29,840 the asset ceiling. The expected contribution payments and benefits paid over the course of the fiscal year are taken into account when As of December 31, 2021, the weighted average duration of the determining net interest. defined benefit obligation amounted to 16.6 years (previous year: 16.6 years). Net interest expense of the respective fiscal year is based on the discount rate and the defined benefit obligation at the beginning of BASF tendered and reissued the mandate for the actuarial valuation the year. of indirect obligations at BASF Pensionskasse VVaG and of direct obligations of the German group, effective as of May 1, 2021. In this context, some of the previous assumptions and valuation methods were modified. This led to actuarial losses totaling €8 million, which were included in adjustments relating to financial assumptions.