Volkswagen AG, Wolfsburg, Germany, has set up an off-balance-sheet employee pension trust, a combination of defined benefit and defined contribution plans covering the groups 125,000 German staff members, including employees at subsidiaries Audi and Volkswagen Financial Services. Volkswagen initially will transfer 160 million deutsche marks ($77 million) into the plan. The groups existing book reserves for paying pensions,16.5 billion marks, will remain on the balance sheet and are not affected by the launch of the new trust, said Ariane Reinhart, Volkswagens head of international labor relations.
Volkswagen is obliged by law to provide its staff with a guaranteed minimum level of benefits. Returns above that minimum level will depend on the performance of the investment portfolios, she said.
Volkswagens treasury team has hired five external managers, but asset allocations had not yet been determined, said a treasury spokeswoman who asked not to be named. She would not name the managers.