Discount rates can be broken down by geographic zone as follows:
| In % | 2021 | 2020 | 2019 |
|---|---|---|---|
| Weighted average (all countries) based on the benefit obligation | Weighted average (all countries) based on the benefit obligation2021 1.6% |
Weighted average (all countries) based on the benefit obligation2020 1.1% |
Weighted average (all countries) based on the benefit obligation2019 1.6% |
| Of which: | Of which: 2021
|
Of which: 2020
|
Of which: 2019
|
| Euro zone | Euro zone 2021
|
Euro zone 2020
|
Euro zone 2019
|
| Discount rate (commitment)(1) | Discount rate (commitment) (1)20211.0% |
Discount rate (commitment) (1)20200.5% |
Discount rate (commitment) (1)20190.9% |
| Discount rate (service cost)* | Discount rate (service cost) *20211.1% |
Discount rate (service cost) *20200.6% |
Discount rate (service cost) *20191.0% |
| USA | USA 2021
|
USA 2020
|
USA 2019
|
| Discount rate (commitment) | Discount rate (commitment) 20212.5% |
Discount rate (commitment) 20202.0% |
Discount rate (commitment) 20192.8% |
| Discount rate (service cost)* | Discount rate (service cost) *20212.8% |
Discount rate (service cost) *20202.3% |
Discount rate (service cost) *20193.0% |
| United Kingdom | United Kingdom 2021
|
United Kingdom 2020
|
United Kingdom 2019
|
| Discount rate (commitment) | Discount rate (commitment) 20212.0% |
Discount rate (commitment) 20201.5% |
Discount rate (commitment) 20192.0% |
| Discount rate (service cost)* | Discount rate (service cost) *20212.0% |
Discount rate (service cost) *20201.5% |
Discount rate (service cost) *20192.0% |
(1) The weighted average for 2021 consists of a 1.02% discount rate on annuity plans with an average term of 19.86 years and a 0.72% discount rate on capital plans with an average term of 11.23 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 €237.0 million for the euro zone, €89.0 million for the United States and €74.5 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 % | 31.12.2021 | 31.12.2020 | 31.12.2019 |
|---|---|---|---|
| Equity securities(1) | Equity securities (1)31.12.202136.6% |
Equity securities (1)31.12.202035.2% |
Equity securities (1)31.12.201933.9% |
| Bonds | Bonds 31.12.202154.1% |
Bonds 31.12.202057.2% |
Bonds 31.12.201957.8% |
| Property assets(2) | Property assets (2)31.12.20214.3% |
Property assets (2)31.12.20204.6% |
Property assets (2)31.12.20194.8% |
| Monetary instruments | Monetary instruments 31.12.20213.3% |
Monetary instruments 31.12.20200.9% |
Monetary instruments 31.12.20190.6% |
| Other(1) | Other (1)31.12.20211.7% |
Other (1)31.12.20202.1% |
Other (1)31.12.20192.9% |
| TOTAL | TOTAL31.12.2021100% | TOTAL31.12.2020100% | TOTAL31.12.2019100% |
(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.
