The provisions for pensions and similar obligations are made up as follows:

In Germany, Demag Cranes AG pays post-employment benefits to almost all retired employees. Outside Germany, post-employment benefits have been granted to employees in Switzerland and South Africa. The level of post-employment benefit depends on salary-based entitlement and/or position in the Company and length of service.

The defined benefit obligation changed as follows in financial year 2009/2010 (2008/2009):

The actuarial gains and losses result from differences between the actual and expected benefit obligation. The change in defined benefit obligations mainly relates to a reduction in the discount factor from 5.35 percent to 3.90 percent.

The table below reconciles the present value of defined benefit obligations to the amount of the obligation stated in the Statement of Financial Position:

The fair value of plan assets changed as follows:

Only plans outside Germany are funded.

Plan assets are made up as follows:

The investment objectives of Demag Cranes AG are to maximise returns while limiting risk. Investments in debt and equity instruments, cash and cash equivalents and property are made in observance of the Group’s risk management policies. The diversified securities portfolio includes both domestic and foreign securities. The securities portfolio is administered by the trustees.

The expected return on plan assets is based on average market expectations for the period over which the obligation is settled.

Based on actuarial calculations, the composition of the pension expense is as follows:

The assumed discount rates, rates of salary increases and benefit increases used to compute the benefit obligation, including the long-term return on plan assets, vary with economic conditions in the countries where the pension plans are in effect.

The actuarial assumptions are as follows:

Experience adjustments are as follows:

Experience adjustments are the ratio of the portion of actuarial gains and losses comprising differences between previous computation assumptions and what has actually occurred to the amount of the defined benefit obligation and plan assets at the balance sheet date. The figures state the increase (+) or decrease (–) in the defined benefit obligation/plan assets required by the differences measured.

Deferred Compensation

Deferred compensation is a form of pension funded by employees out of their pay. Under an agreement between a Group member company and the employee, a portion of the employee’s earnings are withheld and paid out at a later date. The benefit entitlements resulting from deferred compensation are computed using actuarial methods. EUR 9,407,000 in deferred compensation was recognised as liabilities in financial year 2009/2010 (2008/2009: EUR 8,884,000).

Defined Contribution Plans

In addition to the defined benefit plans, contributions are paid notably in Germany, Brazil, Denmark, the USA and the UK into defined contribution plans. Under defined contribution arrangements, Demag Cranes AG pays contributions by law, by contractual agreement or voluntarily into state or private pension funds. Contributions are recognised as an expense in the year they are paid. EUR 14,218,000 was recognised as an expense in financial year 2009/2010 (2008/2009: EUR 18,045,000). This included EUR 12,040,000 (2008/2009: EUR 14,525,000) in contributions to the state pension scheme in Germany.