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Pension plans

The Company has retirement plans covering substantially all employees. The principal plans are defined contribution plans, except for the plans of the Company’s operations in the Netherlands and Japan.

Multi-employer plan

The Company’s employees in the Netherlands, approximately 143 employees, participate in a multi-employer union plan, 'Pensioenfonds van de Metalektro' ('PME') determined in accordance with the collective bargaining agreements effective for the industry in which ASMI operates. This collective bargaining agreement has no expiration date. This multi-employer union plan covers approximately 1,260 companies and 145,000 contributing members. ASMI’s contribution to the multi-employer union plan is less than 5% of the total contribution to the plan as per the annual report for the year ended December 31, 2013. The plan monitors its risks on a global basis, not by company or employee, and is subject to regulation by Dutch governmental authorities. By law (the Dutch Pension Act), a multi-employer union plan must be monitored against specific criteria, including the coverage ratio of the plan assets to its obligations. This coverage ratio must exceed 104.3% for the total plan. Every company participating in a Dutch multi-employer union plan contributes a premium calculated as a percentage of its total pensionable salaries, with each company subject to the same percentage contribution rate. The premium can fluctuate yearly based on the coverage ratio of the multi-employer union plan. The pension rights of each employee are based upon the employee’s average salary during employment.

ASMI’s net periodic pension cost for this multi-employer union plan for any period is the amount of the required contribution for that period. A contingent liability may arise from, for example, possible actuarial losses relating to other participating entities because each entity that participates in a multi-employer union plan shares in the actuarial risks of every other participating entity or any responsibility under the terms of a plan to finance any shortfall in the plan if other entities cease to participate.

The coverage ratio of the multi-employer union plan decreased to 102.0% as of December 31, 2014 (December 31, 2013: 103.4%). Because of the low coverage ratio PME prepared and executed a so-called 'Recovery plan' which was approved by De Nederlandsche Bank, the Dutch central bank, which is the supervisor of all pension companies in the Netherlands. Due to the low coverage ratio and according the obligation of the 'Recovery plan' the pension premium percentage is 23.6% in 2014 (2013: 24.1%). The coverage ratio is calculated by dividing the plan assets by the total sum of pension liabilities and is based on actual market interest.

The Company accounts for the multi-employer plan as if it were a defined contribution plan as the manager of the plan, PME, stated that its internal administrative systems do not enable PME to provide the Company with the required Company-specific information in order to account for the plan as a defined benefit plan. The Company's net periodic pension cost for the multi-employer plan for a fiscal period is equal to the required contribution for that period.

A contingent liability may arise from, for example, possible actuarial losses relating to other participating companies because each company that participates in a multi-employer plan shares in the actuarial risks of other participating companies or any responsibility under the terms of a plan to finance any shortfall in the plan if other companies cease to participate. The plan thus exposes the participating companies to actuarial risks associated with current and former employees of other companies with the result that no consistent and reliable basis for allocating the pension obligation, plan assets and cost to individual companies participating in the plan exists.

Defined benefit plan

The Company’s employees in Japan participate in a defined benefit plan. The Company makes contributions to defined benefit plans in Japan that provide pension benefits for employees upon retirement. These are average-pay plans, based on the employees' years of service and compensation near retirement.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at December 31, 2014. The present value of the defined benefit obligation and the related current service cost and passed service cost were measured using the Projected Unit Credit Method. Significant actuarial assumptions for the determination of the defined obligation are discount rate, future general salary increases and future pension increases.

The net liability of the plan developed as follows:

 December 31,
 20132014
Defined benefit obligations(7,604)(8,079)
Fair value of plan assets5,1276,297
Net liability for defined benefit plans(2,477)(1,782)

The changes in defined benefit obligations and fair value of plan assets are as follows:

 December 31,
 20132014
Defined benefit obligations
Balance January 18,3577,604
Current service cost529515
Interest on obligation11369
Remeasurement losses66098
Benefits paid(128)(164)
Foreign currency translation effect(1,927)(43)
Balance December 317,6048,079
Fair value of plan assets
Balance January 14,7945,127
Interest income7452
Remeasurement gains358113
Company contribution1,2331,162
Benefits paid(128)(164)
Foreign currency translation effect(1,204)7
Balance December 315,1276,297

The remeasurement results on the defined benefit obligations consist solely of experience assumptions of €98. The remeasurement gains on the plan assets relates to changes in financial assumptions.

The history of the experience adjustments is as follows:

20102011201220132014
Present value of defined benefit obligation8,8089,4858,3577,6048,079
Fair value of plan assets3,1894,0904,7945,1276,297
Deficit5,6195,3953,5632,4771,782

The defined benefit cost consists of the following:

 December 31,
 20132014
Current service cost529516
Net interest costs3917
Other(112)(69)
Net defined benefit cost456464

The actual return on plan assets was €112 for the year ended December 31, 2013 (2013: €382).

The assumptions in calculating the actuarial present value of benefit obligations and net periodic benefit cost are as follows:

 20132014
Discount rate for obligations0.90%0.90%
Expected rate of compensation increase2.93%2.93%

The main risk on the pension plan relates to the discount rate. The defined benefit obligation is sensitive to a change in discount rates, a relative change of the discount rate with 25 basis points would have resulted in a change of the defined benefit obligation with 2.6%.

The allocation of plan assets is as follows:

 December 31,
 20132014
Equity1,35126%1,65526%
Bonds3,01959%3,63958%
Loans4539%67411%
Real estate892%781%
Other2154%2514%
5,127100%6,297100%

The investment strategy is determined based on an asset-liability study in consultation with investment advisers and within the boundaries given by regulatory bodies for pension funds. Equity securities consist primarily of publicly traded Japanese companies and common collective funds. Publicly traded equities are valued at the closing prices reported in the active market in which the individual securities are traded (level 1). Common collective funds are valued at the published price (level 1) per share multiplied by the number of shares held as of the measurement date.

Fixed income (bonds and loans) consists of corporate bonds, government securities and common collective funds. Corporate and government securities are valued by third-party pricing sources (level 2). Common collective funds are valued at the net asset value per share (level 2) multiplied by the number of shares held as of the measurement date.

Real estate fund and other values are primarily reported by the fund manager and are based on valuation of the underlying investments (level 3) which include inputs such as cost, discounted cash flows, independent appraisals and market based comparable data.

The plan assets do not include any of the Company’s shares.

Retirement plan costs

ASMI contributed €1,162 to the defined benefit plan in 2014. The Company expects to pay benefits for years subsequent to December 31, 2014 as follows:

Expected contribution defined benefit plan
2015318
2016208
2017506
2018653
2019608
Aggregate for the years 2020-20242,860
Total5,153

Retirement plan costs consist of the following: 

 December 31,
 20132014
Defined contribution plans2,0432,478
Multi-employer plans1,2741,220
Defined benefit plans527464
Total retirement plan costs3,8444,162

The Company does not provide for any significant post-retirement benefits other than pensions.

Welcome to our 2014 Corporate reporting site

ASMI has a dual listing on Nasdaq (North America) and Euronext (the Netherlands). Our full 2014 Annual report is prepared in accordance with International Financial Reporting Standards ('IFRS'), as endorsed by the European Union and can be viewed online conveniently. We also file the Annual report on Form 20-F with the US Securities and Exchange Commission, which is available as a PDF. All our 2014 reports can be downloaded quickly and easily.

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STATUTORY
ANNUAL REPORT 2014

Our Statutory annual report provides a comprehensive overview of company developments in 2014. It has been prepared in accordance with International Financial Reporting Standards ('IFRS') as endorsed by the European Union.

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ANNUAL REPORT ON
FORM 20-F 2014

Form 20-F 2014, which is compiled based on US GAAP, has been filed with the Securities and Exchange Commission. It may contain information additional to the Statutory annual report.

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CR REPORT
2014

Our goal is to create better products and add value to the company, our stakeholders and society at large in a responsible, sustainable manner. Our CS report covers all aspects of our efforts to manage our business responsibly.

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REMUNERATION
REPORT 2014

The Remuneration report 2014 provides a breakdown
of our Management Board and Supervisory Board remuneration.

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RECONCILIATION
US GAAP-IFRS 2014

With dual listing in North America and the Netherlands, we report in US GAAP and IFRS. This document outlines the main differences for ASMI relating to US GAAP and IFRS.

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