Other liabilities

Other provisions

(€ million)31.12.201331.12.2012
Provisions for taxation 174 67
Provisions for commitments 598 702
Other provisions 996 701
Total 1,768 1,471

Provisions for commitments and other provisions include provisions for corporate restructuring, litigation or similar events as well as other commitments for which, at balance sheet date, an outflow of resources to settling the related obligation is considered probable.

In the normal course of business, the Group may enter into arrangements that do not lead to the recognition of assets and liabilities in the consolidated financial statements under IFRS (potential assets and liabilities). However, as these arrangements don’t represent a significant source of investment or financing of Group resources, at 31 December 2013 there were no significant positions of assets and liabilities off-balance sheet.

The table below summarized the main changes occurred during the period:

(€ million)31.12.201331.12.2012
Carrying amount as at 31 December previous year 1,471 1,386
Foreign currency translation effects -6 2
Changes in consolidation scope -48 4
Variations 352 79
Carrying amount as at the end of the period 1,768 1,471

Provisions for defined benefit plans

The pension benefits of Generali Group’s employees are mainly in the form of defined benefit plans and defined contribution plans.

As for defined benefit plans, participants are granted a defined pension benefits by the employers or via external entities.

The main defined benefits plans are concentrated in Germany, Austria and Switzerland, while in Italy the provision for Trattamento di fine rapporto (employee severance pay) matured until 1st January 2007 is included in the provisions for defined benefit plan for € 102 million.

Starting from 1 January 2013 the amended IAS 19 is effective. This standard, in comparison with the version adopted for the 2012 consolidated financial statements, includes amendments deeper described in the Basis of presentation and accounting principles included in the section "Notes to the Consolidated Financial Statements". Also impacts on Balance Sheet and Profit and Loss account are described in the above mentioned paragraph.

The main amendment is the elimination of the "corridor" option for the off-balance sheet recognition of gains or losses arising from the re-measurement of obligations related with defined benefit plans and with assets servicing these plans. The application of the aforementioned amendment results in the recognition in Other Comprehensive Income of unrecognised actuarial losses; the application of IAS 19 revised has been implemented retrospectively starting from 1 January 2012.

The table below shows the movements in the defined benefit plans liability which occurred during the financial year, net of assets legally separate and held solely to pay or fund employee benefits:

(in milioni di euro)31.12.201331.12.2012
Net liability as at 31 December previous year 3,714 3,122
Foreign currency translation effects -8 2
Net expense recognised in the income statement 227 61
Re-measurements recognised in Other Comprehensive Income -176 755
Contributions and benefits payed -218 -205
Changes in consolidation scope -22 -19
Net liability as at 31 December current year 3,518 3,714

Many of the Group’s defined benefit plans have assets that are designated, but not legally segregated, to meet the pension defined benefit obligations. These are investments related to insurance policies issued by Generali Group insurers, or other investments owned by the Group entities. Consequently, in accordance with IAS 19 these are not recognised as plan assets and so cannot be deducted from the defined benefit obligations. However, to obtain the economic net liability for defined benefit plans these assets would have to be netted against the present value of the related pension obligations.

This is predominantly for Germany and Austria, where the Group retains approximately the 60% of the present value of defined benefit obligations. Moreover, in these countries, the pension guarantee associations, to the extent of the yearly contributions paid by the companies, are liable for the fulfilment of the pension commitments granted in case of company insolvency.

The net defined benefit plans expense of the year recognised in the profit or loss account is represented as follows:

(€ million)31.12.201331.12.2012
Current Service cost 110 97
Net interest 111 160
Past service cost 5 -175
Losses (gains) on settlements 0 -21
Net expense recognised in the income statement 227 61

Gains classified in "past service cost" refer to plan amendments occurring during the previous period that reduced vested benefits related to past services and therefore were immediately recognized as negative past service costs in the profit or loss.

The re-measurement of liabilities related to defined benefit plans and plan assets, recognised in Other comprehensive income of Comprehensive income, are detailed as follows:

(€ million)31.12.201331.12.2012
Actuarial gains (losses) from change in financial assumptions 232 -832
Actuarial gains (losses) from change in demographical assumptions 6 2
Actuarial gains (losses) from experience -116 -11
Return on plan assets (other than interest) 53 86
Re-measurements recognised in Other Comprehensive Income 176 -755

The defined benefit plans’ weighted-average asset allocation by asset category is as follows:

 (%)
31.12.2013
(%)
31.12.2012
Bonds 46.8 49.8
Equities 22.8 20.3
Real estates 16.2 15.7
Investment fund units 5.7 2.8
Insurance policies issued by non Group insurers 0.9 0.9
Other investments 7.6 10.4
Total 100.0 100.0

The assumptions used in the actuarial calculation of the defined benefit obligations and the related periodic pension cost are
based on the best estimates of each companies granting defined benefit plans. The main weighted-average hypotheses considered for the value definition of defined benefits plans obligations are summarized in the following table, for the main operating areas:

 Eurozone %Switzerland%
 31.12.201331.12.201231.12.201331.12.2012
Discount rate 3.6 3.3 2.1 1.8
Rate of salary increase 2.8 2.9 1.6 1.7
Rate of pension increase 2.1 2.1 0 0

The average duration of the obligation for defined benefit plans is 13.7 years at 31December 2013 (13.8 years at 31 December 2012).

Other liabilities

(€ million)31.12.201331.12.2012
Liabilities directly associated to non-current assets and disposal groups classified as
held for sale
648 0
Deferred tax liabilities 2,338 2,996
Tax payables 1,607 1,639
Other liabilities 5,993 5,869
Total 10,586 10,504

The variation from 31 December 2012 to 31 December 2013 of Liabilities directly associated to non-current assets or disposal groups classified as held for sale was attributable to the reclassification into this category of liabilities relating to Fata Assicurazioni Danni.

Other liabilities also include liabilities related to defined employee benefit plans amounting to € 3,416 million. In
accordance with IAS 19 revised applied retrospectively from 1 January 2012, the comparative period amount was restated
in accordance with the new accounting principle. The new amount of liability related to defined employee benefit plans
at 31 December 2012 is of € 3,613 million.

Defined benefit obligation

The table below shows the movements in the defined benefit obligation and plan assets during the financial year:

(€ million)31.12.201331.12.2012
Defined benefit obligation as at 31 December previous year 5,429 4,743
Foreign currency translation effects -28 9
Current Service cost 110 97
Past service cost 5 -175
Interest expense 146 208
Actuarial losses (gains) -123 841
Losses (gains) on settlements 0 -36
Contribution by plan participants 18 19
Benefits paid -247 -237
Changes in consolidation scope -38 -41
Defined benefit obligation as at 31 December current year 5,273 5,429
(€ million)31.12.201331.12.2012
Fair value of plan assets as at 31 December previous year 1,715 1,621
Foreign currency translation effects -20 7
Interest income 34 49
Return on plan assets (other than interest) 53 86
Gains (losses) on settlements 0 -14
Employer contribution 57 41
Contribution by plan participants 18 19
Benefits paid -86 -72
Changes in consolidation scope -16 -21
Fair value of plan assets as at 31 December 1,755 1,715
Assicurazioni Generali S.p.A. - C.F. e P.IVA 00079760328