BASF Report 2021 Consoli dated Financial Statements – Notes 256 Switzerland Actuarial assumptions The valuation of the defined benefit obligation is generally performed The employees of the BASF Group in Switzerland receive a company using the most recent actuarial mortality tables as of December 31 pension, which is financed through a pension fund by employer and The valuation of the defined benefit obligation is based on the of the respective business year, which in Germany and the United employee contributions as well as the return on plan assets. The following key assumptions: States are derived from the BASF Group population and were last pension plans are accounted for as defined benefit plans, as the updated in 2019 for the pension obligations in Germany and in 2018 obligatory minimum pension guaranteed by law under the Swiss Assumptions used to determine the defined benefit obligation as of for the pension obligations in the United States. The actuarial Pension Fund Act (BVG) is included in the scheme. All benefits vest December 31 mortality tables for the pension obligations in Switzerland were immediately. According to government regulations, the employer is United adjusted in 2021. obligated to make contributions, so that the pension funds are able Germany United States Switzerland Kingdom to grant the minimum benefits guaranteed by law. The pension 2021 2020 2021 2020 2021 2020 2021 2020 Actuarial mortality tables (significant countries) as of December 31, 2021 funds are managed by boards, where employer and employees are Discount rate 1.10 0.70 2.70 2.30 0.40 0.10 2.00 1.50 Germany Heubeck Richttafeln 2018G (modified) equally represented, which steer and monitor the benefit plans and Projected pension asset allocation. increase 1.60 1.50 – – – – 3.50 3.10 United States RP-2018 (modified) with MP-2018 generational projection United Kingdom Switzerland BVG 2020 generational with CMI 2018 mortality improvement Employees are granted benefits based on a defined contribution Assumptions used to determine expenses for pension benefits in the S2PxA (standard actuarial mortality tables for plan. respective business year United Kingdom self-administered plans (SAPS)) United The BASF Group also maintains defined benefit plans in the United Germany United States Switzerland Kingdom Kingdom, which have been closed for further increases based on 2021 2020 2021 2020 2021 2020 2021 2020 future years of service. Adjustments to compensate for increases in Discount rate 0.70 1.10 2.30 3.10 0.10 0.20 1.50 2.20 the cost of living until the beginning of retirement are legally required Projected pension for beneficiaries of defined benefit plans. increase 1.50 1.50 – – – – 3.10 3.00 The financing of the pension plans is determined by the provisions The assumptions used to ascertain the defined benefit obligation as of the regulatory authority for pensions and the relevant social and of December 31 are used in the following year to determine the labor law requirements. The defined benefit plans are administered expenses for pension plans. by a trust company, whose Board of Trustees, according to the trustee agreement and law, represents the interests of the A Group-wide, uniform procedure is used to determine the discount beneficiaries and ensures that the benefits can be paid in the future. rates applied for valuation of material pension obligations of the The required funding is determined using technical valuations BASF Group. Accordingly, the discount rates were derived from the according to local regulations every three years. yields on corporate bonds in the respective currency zones with an issue volume of more than 100 million units of the respective Other countries currency with a minimum rating of AA– to AA+ from at least one of For Group companies in other countries, defined benefits are the following three rating agencies: Fitch, Moody’s, or Standard & covered in some cases by pension provisions, but mainly by external Poor’s. insurance companies or pension funds.