✓ audited

Pension benefits

Annual pension units are accrued for the members of the Board (“Board Performance Pension”). The method of determination of the amount of the pension benefits generally corresponds to that used for the other senior executives of the German BASF Group. The method is designed such that both the performance of the company and the progression of the individual Board member’s career significantly affect the pension entitlement.

The annual pension benefits accruing to Board members in a given reporting year (pension unit) are composed of a fixed and a variable component. The fixed component is calculated by multiplying the annual fixed compensation above the Social Security Contribution Ceiling by 32% (contribution factor). The resulting amount is converted into a lifelong pension using actuarial factors based on an actuarial interest rate (5%), the probability of death, invalidity and bereavement (Heubeck-Richttafeln, 2005G) and an assumed pension increase (at least 1.0% per annum). This is the amount that is payable upon retirement. The variable component of the pension unit depends on the return on assets in the reporting year and the performance factor, which is also decisive for the bonus. The fixed and the variable components together result in the acquired pension unit for the reporting year. The sum of the pension units accumulated over the reporting years determines the respective Board member’s pension benefit in the event of a claim. The pension benefit takes effect at the end of service upon reaching retirement age of 60 years, or disability or death. Pension payments are reviewed on a regular basis and adjusted by at least 1% each year.

The pension units also include survivor benefits. Upon the death of an active or former member of the Board, the surviving spouse receives a survivor pension amounting to 60% of the Board member’s pension entitlement. The orphan pension amounts to 10% for each half-orphan, 33% for an orphan, 25% each for two orphans and 20% each for three or more orphans of the pension entitlement of the deceased (former) Board member. The survivor benefits may not exceed 75% of the Board member’s total pension entitlement. If the survivor pensions exceed the upper limit, they will be proportionately reduced.

Board members are members of the BASF Pensionskasse VVaG, as are generally all employees of BASF SE. Contributions and benefits are determined by the Statutes of the BASF Pensionskasse VVaG and the General Conditions of Insurance.

The service costs attributable to 2012 include costs for BASF Pensionskasse VVaG as well as for the Performance Pension and are as follows: Dr. Kurt Bock €818 thousand (2011: €760 thousand); Dr. Martin Brudermüller €570 thousand (2011: €566 thousand); Dr. Hans-Ulrich Engel €462 thousand (2011: €485 thousand); Michael Heinz €418 thousand (2011: €226 thousand); Dr. Andreas Kreimeyer €476 thousand (2011: €497 thousand); Dr. Stefan Marcinowski €159 thousand (2011: €500 thousand); Dr. Harald Schwager €441 thousand (2011: €465 thousand); Wayne T. Smith €318 thousand; and Margret Suckale €408 thousand (2011: €256 thousand).

The present value of pension benefits (defined benefit obligation) is an accounting figure for the entitlements that the Board members have accumulated in their years of service at BASF. The defined benefit obligations up to and including 2012 are as follows: Dr. Kurt Bock €13,083 thousand (2011: €8,647 thousand); Dr. Martin Brudermüller €8,991 thousand (2011: €5,768 thousand); Dr. Hans-Ulrich Engel €7,018 thousand (2011: €4,620 thousand); Michael Heinz €5,246 thousand (2011: €3,136 thousand); Dr. Andreas Kreimeyer €11,081 thousand (2011: €7,943 thousand); Dr. Harald Schwager €6,596 thousand (2011: €4,277 thousand); Wayne T. Smith €488 thousand; and Margret Suckale €1,817 thousand (2011: €975 thousand).