At 31 December 2019, the equities held as part of fund assets are distributed as follows:
At 31 December 2019, the bonds held as part of fund assets are distributed as follows:
Around 67% of all these bonds are sovereign bonds, mainly issued by the United Kingdom. The balance mainly consists of bonds issued by financial and non-financial firms.
The portion of sovereign bonds issued by the United Kingdom was 7 percentage points higher than at 31 December 2018.
Cash flows related to future employee benefits are as follows:
| (in millions of euros) | Cash flow under year-end economic conditions | Amount covered by provisions(present value) |
|---|---|---|
| Less than one year | Less than one year Cash flow under year-end economic conditions 269 | Less than one year Amount covered by provisions(present value) 264 |
| One to five years | One to five years Cash flow under year-end economic conditions 1,093 | One to five years Amount covered by provisions(present value) 1,050 |
| Five to ten years | Five to ten years Cash flow under year-end economic conditions 1,515 | Five to ten years Amount covered by provisions(present value) 1,353 |
| More than ten years | More than ten years Cash flow under year-end economic conditions 12,953 | More than ten years Amount covered by provisions(present value) 7,023 |
| CASH FLOWS RELATED TO EMPLOYEE BENEFITS | CASH FLOWS RELATED TO EMPLOYEE BENEFITS Cash flow under year-end economic conditions 15,830 | CASH FLOWS RELATED TO EMPLOYEE BENEFITS Amount covered by provisions(present value) 9,690 |
The contribution to funds for 2020 is estimated at approximately €289 million (€277 million contributed by the employer and €12 million by the employees).
The average weighted duration of funds in the United Kingdom is 19.5 years at 31 December 2019.
| (in %) | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Discount rate/rate of return on assets* | Discount rate/rate of return on assets *31/12/2019 2.11% | Discount rate/rate of return on assets *31/12/2018 2.86% |
| Inflation rate | Inflation rate 31/12/2019 2.89% | Inflation rate 31/12/2018 2.99% |
| Wage increase rate | Wage increase rate 31/12/2019 2.28% | Wage increase rate 31/12/2018 2.39% |
*The interest income generated by assets is calculated using the discount rate. The difference between this interest income and the return on assets is recorded in equity.
In the United Kingdom, the discount rate used for employee benefit obligations is determined by applying the yield rate on high-quality non-financial corporate bonds based on their duration to maturities corresponding to the future disbursements resulting from these obligations.
Sensitivity analyses on the amount of the obligations are as follows:
| (in %) | 31/12/2019 |
|---|---|
| Impact of a 25bp increase or decrease in the discount rate | Impact of a 25bp increase or decrease in the discount rate 31/12/2019 -4.6% / +4.9% |
| Impact of a 25bp increase or decrease in the inflation rate | Impact of a 25bp increase or decrease in the inflation rate 31/12/2019 +3.6% / -3.4% |
| Impact of a 25bp increase or decrease in the wage increase rate | Impact of a 25bp increase or decrease in the wage increase rate 31/12/2019 +0.4% / -0.4% |
