Discount rates can be broken down by geographic zone as follows:
| In % | 2022 | 2021 | 2020 |
|---|---|---|---|
| Weighted average (all countries) based on the benefit obligation | Weighted average (all countries) based on the benefit obligation20224.2% | Weighted average (all countries) based on the benefit obligation20211.6% | Weighted average (all countries) based on the benefit obligation20201.1% |
| Of which: | Of which: 2022
|
Of which: 2021
|
Of which: 2020
|
| Euro zone | Euro zone 2022
|
Euro zone 2021
|
Euro zone 2020
|
| Discount rate (commitment)(1) | Discount rate (commitment) (1)20223.7% |
Discount rate (commitment) (1)20211.0% |
Discount rate (commitment) (1)20200.5% |
| Discount rate (service cost)* | Discount rate (service cost)* 20223.7% |
Discount rate (service cost)* 20211.1% |
Discount rate (service cost)* 20200.6% |
| USA | USA 2022
|
USA 2021
|
USA 2020
|
| Discount rate (commitment) | Discount rate (commitment) 20225.0% |
Discount rate (commitment) 20212.5% |
Discount rate (commitment) 20202.0% |
| Discount rate (service cost)* | Discount rate (service cost)* 20225.3% |
Discount rate (service cost)* 20212.8% |
Discount rate (service cost)* 20202.3% |
| United Kingdom | United Kingdom 2022
|
United Kingdom 2021
|
United Kingdom 2020
|
| Discount rate (commitment) | Discount rate (commitment) 20224.8% |
Discount rate (commitment) 20212.0% |
Discount rate (commitment) 20201.5% |
| Discount rate (service cost)* | Discount rate (service cost)* 20224.8% |
Discount rate (service cost)* 20212.0% |
Discount rate (service cost)* 20201.5% |
(1) The weighted average for 2022 consists of a 3.73% discount rate on annuity plans with an average term of 16.25 years and a 3.63% discount rate on capital plans with an average term of 10.56 years.
* Used for the service cost for the following financial year.
A 50 basis point decrease in the discount rates would increase the projected defined benefit obligations by €131.5 million for the euro zone, €76.0 million for the United States and €38.7 million for the United Kingdom.
The expected returns on plan assets are based on the discount rates used.
The breakdown of plan assets is as follows:
| In % | 31.12.2022 | 31.12.2021 | 31.12.2020 |
|---|---|---|---|
| Equity securities(1) | Equity securities (1)31.12.202234.0% |
Equity securities (1)31.12.202136.6% |
Equity securities (1)31.12.202035.2% |
| Bonds | Bonds 31.12.202251.5% |
Bonds 31.12.202154.1% |
Bonds 31.12.202057.2% |
| Property assets(2) | Property assets (2)31.12.20225.9% |
Property assets (2)31.12.20214.3% |
Property assets (2)31.12.20204.6% |
| Monetary instruments | Monetary instruments 31.12.20223.4% |
Monetary instruments 31.12.20213.3% |
Monetary instruments 31.12.20200.9% |
| Other | Other 31.12.20225.2% |
Other 31.12.20211.7% |
Other 31.12.20202.1% |
| TOTAL | TOTAL31.12.2022100% | TOTAL31.12.2021100% | TOTAL31.12.2020100% |
(1) Of which L’Oréal shares: none.
(2) Of which property assets occupied by Group entities: none.
The allocation of plan assets has to comply with specific investment limits for the different classes of assets and meet minimum rating criteria for monetary instruments and bonds.
