8.Employees and Pension Obligations

As of June 30, 2020, the Covestro Group had 16,803 employees worldwide (December 31, 2019: 17,201). In the first half of 2020, personnel expenses were down €5 million to €913 million (previous year: €918 million), chiefly on account of a decrease in current provisions recognized for short-term variable compensation.

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Employees by corporate function1

 

  

 

  

 

 

  

Dec. 31, 2019

  

June 30, 2020

1

The number of employees on either permanent or temporary contracts is stated in full-time equivalents (FTEs). Part-time employees are included on a pro-rated basis in line with their contractual working hours. Employees in vocational training are not included.

Production

  

11,162

  

10,917

Marketing and distribution

  

3,314

  

3,220

Research and development

  

1,217

  

1,210

General administration

  

1,508

  

1,456

Total

  

17,201

  

16,803

Provisions for pensions and other post-employment benefits declined to €1,881 million (December 31, 2019: €1,965 million). This was principally due to a decrease in the valuation of pension obligations as a result of higher discount rates, but was countered, in particular, by a negative development in the value of plan assets.

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Discount rate for pension obligations

 

  

 

  

 

 

  

Dec. 31, 2019

  

June 30, 2020

 

  

%

  

%

Germany

  

1.00

  

1.20

United States

  

3.00

  

2.30

A third-party consulting firm has begun calculating the discount rate for pension obligations in the euro area using a standard methodology as of the first quarter of 2020. Without the change in calculation procedure, the discount rate would have remained at 1.20% for Germany as of June 30, 2020. Measurement using the original discount rate would therefore not have changed the pension obligations as of June 30, 2020.