GERMANY - Deutsche Bank has segregated 3.6 billion euros of its German employee pension obligations, removing them from the balance sheet and creating a separate fund that will be managed by Deutsche Asset Management.

Dr. Tessen von Heydebreck, member of the board of managing directors of Deutsche Bank responsible for human resources, said: "With the segregation of the pension obligations, our employees in Germany will acquire an additional safeguard for their company pension entitlements in keeping with international standards. In addition, we are making an important contribution to more transparency and the improved comparability of our balance sheet."

At the start of December 2002 pension provisions amounting to 3.6 billion euros, and concerning around 75,000 employees and pensioners, were invested using a ´contractual trust arrangement´ into special securities. This amount will be increased further by an additional amount of 400 million euros.

In order to achieve the preferred earnings/risk ratio, investments were made in an internationally diversified portfolio, currently comprising 80% fixed-interest securities (government and corporate bonds) and 20% equities and other risk assets.

The assets retained to finance the pension provisions will be transferred to a legal, independent trustee and consequently deducted from the bank’s operating assets.

Pensioners will continue to receive their payments directly from Deutsche Bank and all Group companies will continue to be liable for the full extent of their obligations to provide a company pension.

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