The Group maintains defined benefit plans for its employees in Switzerland, Germany, Austria, and the USA. These plans are either funded or unfunded. Funded plans are either funded by assets held independently of the Group’s assets in separate trustee-administered funds or by qualifying insurance policies. The net periodic pension costs of the defined benefit plans were as follows:

The following table shows the current status of the defined benefit pension plans and the amounts recognized in the Group’s consolidated balance sheets:

The plan assets of funded plans of MCHF 403.5 (PY: MCHF 369.4) are composed of assets of MCHF 391.8 (PY: MCHF 359.3) in two independent Swiss trustee pension funds and MCHF 11.7 (PY: MCHF 10.1) in qualifying insurance policies.

The legal situation relating to pension plans in Switzerland strictly limits the Group’s control over the surplus in the Swiss pension funds. In the case of material underfundings, recapitalization measures have to be taken in which also beneficiaries can be obliged to participate.

As of December 31, 2012, no underfundings existed for Swiss pension plans in compliance with Swiss GAAP FER (FER 26).

The benefit obligations, the plan assets, the funded status, and the net actuarial gains and losses were as follows:

The plan assets of the Swiss pension fund are split into the following asset categories (in %) at the end of the year:

The expected return on plan assets is calculated based on long-term returns on the investments in the respective asset category. The investments per asset category follow the guidelines defined in the strategic asset allocation policy.

The actual return on these plan assets amounted to +7.6% in 2012 and -0.2% in 2011. As of December 31, 2012, plan assets included MCHF 3.1 (PY: MCHF 2.7) of equity instruments of Geberit AG and MCHF 10.1 (PY: MCHF 10.1) in real estate property used by the Group.

In 2013, the expected employers’ contribution to the plan assets is MCHF 8.1.

The following actuarial assumptions were used for the calculation of the defined benefit obligations and the expected return on plan assets (in %):

The decrease in the discount rate compared to previous year results in a significant increase in the defined benefit obligation. This increase was overcompensated by the adjustments of the economic and demographic assumptions for Swiss pension plans. The expected inflation offset to pensions was reduced from 1% to 0%, as the Swiss pension plans do not longer foresee this compensation. Because of the higher fluctuation rate, the expected employee departure rate is now calculated on the basis of the BVG 2010 tables. To take better account of the increase in life expectancy, the periodic mortality tables were replaced by the generational tables. The impacts of these adjustments were recorded as actuarial gains and losses and are shown in the table “status of the defined benefit pension plans”.

The development of medical costs has no influence on the benefit obligations of the Swiss pension plans and the pension plan in the USA. In Germany and Austria, medical costs indirectly influence the determination of benefit obligations through the employer contributions to the medical insurance for employees. However, the impact on the benefit obligations is not material.

The consolidated income statement also includes expenses for defined contribution plans of MCHF 2.0 in 2012 (PY: MCHF 1.7).