AmazonScience/document-haystack

1Change in irrecoverable surplus (asset ceiling):2Balance, beginning of year  0  (6)  0  (6)  0  (5)  0  (5) 3Interest cost  0  0  0  0  0  0  0  0 4Changes in irrecoverable surplus  0  (5)  0  (5)  0  (1)  0  (1) 5Exchange rate changes  0  (1)  0  (1)  0  0  0  0 6Balance, end of year  0  (12)  0  (12)  0  (6)  0  (6) 7Net asset (liability) recognized  (11)  1  (3) (12)839 2  2  (3) 0104112023 202212in € m. Germany13EMEA 14(excluding Germany) APAC Total Germany15EMEA 16(excluding Germany) APAC Total171 18Transfers between other subsidiaries of Deutsche Bank Group.192 20For funded plans only.21322 Thereof € 8 million recognized in other assets and € 21 million in other liabilities.234 24Thereof € 10 million recognized in other assets and € 10 million in other liabilities.25Investment Strategy26The Group participates in Deutsche Bank Group’s overall investment strategy. The investment 27objective is to protect against adverse impacts of changes in the funding position of its 28defined benefit pension plans on key financial metrics, with a primary focus on protecting the 29plans’ IFRS funded status, while taking into account the plans’ impact on other metrics, such 30as regulatory capital and local profit or loss accounts. Since 2021, there has been a shift in the 31investment strategy in selected markets to balance competing key financial metrics. 32Investment managers manage pension assets in line with investment mandates or guidelines 33as agreed with the pension plans’ trustees and investment committees.34For key defined benefit plans for which the Group aims to protect the IFRS funded status, a 35liability driven investment approach is applied. Risks from mismatches between fluctuations 36in the present value of the defined benefit obligations and plan assets due to capital market 37movements are minimized, subject to balancing relevant trade-offs. This is achieved by 38allocating plan assets closely to the market risk factor exposures of the pension liability to 39interest rates, credit spreads and inflation such that plan assets broadly reflect the underlying 40risk profile and currency of the pension obligations. 41Where the desired hedging level as defined in Deutsche Bank Group’s overall investment 42strategy for these risks cannot be achieved with physical instruments (i. e. corporate and 43government bonds), derivatives are employed. Derivatives mainly include interest rate, 44inflation swaps and credit default swaps. Other derivative instruments are also used, such as 45interest rate futures and options. In practice, a completely hedged approach is impractical, 46because of insufficient market depth for ultra-long-term corporate bonds, as well as liquidity 47and cost considerations. Therefore, plan assets contain further asset categories to create 48long-term return enhancement and diversification benefits such as equity, real estate, high 49yield bonds or emerging markets bonds. Furthermore, the above mentioned shift in the 50investment strategy in 2021 allows for actively taken market risk exposures from interest rates 51and credit spreads within defined limits. As a result, the market risk from plan assets has 52been reduced.53Plan Asset Allocation to Key Asset Classes54The following table shows the asset allocation of the Group’s funded defined benefit plans to 55key asset classes, i. e. exposures include physical securities in discretely managed portfolios 56and underlying asset allocations of any commingled funds used to invest plan assets. 57Asset amounts in the following table include both “quoted” (i. e. level 1 assets in accordance 58with IFRS 13 “Fair Value Measurement” – amounts invested in markets where the fair value 59can be determined directly from prices which are quoted in active, liquid markets) and 60“other” (i. e. level 2 and 3 assets in accordance with IFRS 13) assets.61         62To our 63Shareholders64Summarised 65Management Report66Consolidated 67Financial Statements Compensation Report Corporate Govern-68ance Statement69Supplementary 70Information DWS 2023 Annual Report71 72Additional Notes73118 19 – Employee Benefits74The secret animal #3 is a "shark".