FINANCIAL AND ACCOUNTING INFORMATION 21.5 Plan asset allocation PLAN ASSETS CLASS (in millions of euros) UNITED KINGDOM CANADA SWITZERLAND Cash and cash equivalents 4.6 0.9 14.8 Equity instruments (quoted in an active market) 15.2 82.4 74.5 Debt instruments (quoted in an active market) 121.4 103.1 82.3 Real estate – – 47.3 Investment funds 235.2 – 0.0 Asset held by insurance company 3.8 3.3 – Other 0.5 – 4.6 As of December 31, 2016 380.6 189.6 223.6 Cash and cash equivalents 0.3 0.9 11.1 Equity instruments (quoted in an active market) 14.9 80.7 80.7 Debt instruments (quoted in an active market) 78.4 100.9 86.3 Real estate – – 44.8 Investment funds 276.3 – – Asset held by insurance company 3.7 3.1 6.9 Other 0.2 – 4.2 As of December 31, 2017 373.8 185.6 233.9 21.6 Actuarial assumptions The main actuarial assumptions are as follows: UNITED KINGDOM CANADA SWITZERLAND 2017 2016 2017 2016 2017 2016 Average plan duration (in years) 19 18 13 13 15 17 Discount rate (in %) 2.50 2.75 3.25 3.75 0.50 0.50 Future salary increases (in %) N/A N/A 3.14 3.13 1.00 1.00 Discount rates have been set by reference to by Finance and Human Resources representatives, market yields on high quality corporate bonds (AA meets on a quarterly basis. This pension committee, rated-bonds by at least one of the top three rating supported by experts, reviews, in particular, the agencies: Standard & Poor’s, Moody’s and Fitch) funding of pension plans, and the performance with a similar duration to the underlying obligation. of the pension plan’s assets. It is informed of any Each future year expected benefit payments are material event in relation to the benefits granted to discounted by the corresponding of the yield curve employees, the financial impact in relation to the and when there is no deep market in bonds with a plans, or changes in the regulations. The committee sufficiently long maturity to match the maturity of reports to Audit Committee on a yearly basis. the benefit payments, the discount rate is estimated The Group’s major defined benefit plans are subject by extrapolating current market rates along the yield to funding requirements that mainly fluctuate based curve. Then a single discount rate is calculated that, on interest rates, performance of plan assets and when applied to all cash flows, results in the same changes in local regulations. Depending on changes interest cost as the application of the individual rates in the above parameters, the Group may be required would have produced. to make additional contributions to the pension 21.7 Post-employment plan risks funds in a defined time frame. In order to identify and deal with the risks in relation Volatility in discount rates and inflation to the management of pension and other post- The defined benefit l iabi l ity is calculated by retirement plans, a pension committee made up discounting future expected cash flows. Discount REXEL 2017 – REGISTRATION DOCUMENT 252