Addtech has defined benefit pension plans in Sweden and Norway. In these plans, a pension is determined mainly by the salary received at the time of retirement. The plans cover many employees, but some defined contribution plans also apply. Subsidiaries in other countries in the Group mainly have defined contribution pension plans.
The Parent Company's data on pensions are reported in accordance with the Swedish Act on Safeguarding Pension Obligations.
These pension plans primarily comprise retirement
pensions. Each employer generally has an obligation to pay a
lifelong pension. Vesting is based on the number of years of
employment. The employee must subscribe to the plan for a certain
number of years to be fully entitled to retirement benefits. Each
year increases the employee's entitlement to retirement benefits,
which is recognised as pension earned during the period and as an
increase in pension obligations. Some funded pension plans apply in
Norway and Sweden. These pension obligations are secured by plan
assets. Addtech applies the 'corridor' method. Corridor rules
stipulate that part of the actuarial gains and losses be recognised
in profit or loss and the balance sheet in the next period if they
exceed the higher of:
-10 percent of the present value of the pension obligation,
and
-10 percent of the fair value of plan assets.
At the end of the year the actuarial losses equalled about 13
percent (9) of the present value of the pension obligations.
Obligations for retirement pensions and family pensions for
salaried employees in Sweden are secured by insurance in Alecta.
According to statement UFR 6 of the Swedish Financial Reporting
Board, this is a defined benefit plan covering multiple employers.
For the 2011/2012 financial year, the Company did not have access
to information enabling it to report this plan as a defined benefit
plan. Thus the pension plan according to ITP and secured by
insurance in Alecta is recognised as a defined contribution plan.
The year's fees for pension insurance with Alecta totalled SEK 13.6
million (12.5).
These plans are mainly retirement pension plans, disability pensions and family pensions. Premiums are paid on an ongoing basis during the year by each Group company to separate legal entities, such as insurance companies. The size of the premium is based on the salary. The pension cost for the period is included in profit or loss.
| Group | Parent Company | ||||
| Pension liability as per balance sheet | 31 Mar 12 | 31 Mar 11 | 31 Mar 12 | 31 Mar 11 | |
| Pension liability PRI | 175.3 | 171.4 | 17.6 | 16.6 | |
| Other pension obligations | 19.8 | 14.8 | – | – | |
| Total | 195.1 | 186.2 | 17.6 | 16.6 | |
| Group | Parent Company | ||||
| Reconciliation of net amount for pensions in the balance sheet | 2011/2012 | 2010/2011 | 2011/2012 | 2010/2011 | |
| Opening balance | 186.2 | 182.9 | 16.6 | 17.0 | |
| Change in accounting for pensions | 14.6 | 16.6 | 2.1 | 0.7 | |
| Payment of pension benefits | -6.3 | -5.8 | -1.1 | -1.1 | |
| Funds contributed by employer | -5.4 | -4.0 | – | – | |
| Disposal of companies | – | -3.2 | – | – | |
| Acquisitions of companies | 6.1 | – | – | – | |
| Translation effects | 0.3 | -0.3 | – | – | |
| Other | -0.4 | 0.0 | – | – | |
| Net amount in balance sheet (obligation +, asset -) | 195.1 | 186.2 | 17.6 | 16.6 | |
| Group | |||||
| Return on plan assets | 2011/2012 | 2010/2011 | |||
| Actual return on plan assets | 1.7 | 1.7 | |||
| Expected return on plan assets | 2.3 | 1.7 | |||
| Actuarial gains/losses on plan assets during the period | -0.6 | 0.0 | |||
| Obligations for employee benefits, defined benefit pension plans | |||||
| Group | Parent Company | ||||
| Obligations for defined benefits and the value of plan assets | 31 Mar 12 | 31 Mar 11 | 31 Mar 12 | 31 Mar 11 | |
| Wholly or partly funded obligations: | |||||
| Present value of defined benefit obligations | 78.3 | 48.4 | – | – | |
| Fair value of plan assets | -49.5 | -34.2 | – | – | |
| Wholly or partly funded obligations, net | 28.8 | 14.2 | – | – | |
| Present value of unfunded defined benefit obligations | 202.8 | 194.5 | 17.6 | 16.6 | |
| Net obligations before adjustments | 231.6 | 208.7 | 17.6 | 16.6 | |
| Adjustments: | |||||
| Accumulated unrecognised actuarial gains (+) and losses (–) | -36.5 | -22.5 | – | – | |
| Net amount in the balance sheet (obligation +, asset –) | 195.1 | 186.2 | 17.6 | 16.6 | |
| The net amount is recognised in the following items in the balance sheet: | |||||
| Provisions for pensions and similar obligations | 195.1 | 186.2 | 17.6 | 16.6 | |
| Net amount in the balance sheet (obligation +, asset –) | 195.1 | 186.2 | 17.6 | 16.6 | |
| The net amount is divided among plans in the following countries: | |||||
| Sweden | 182.7 | 180.0 | 17.6 | 16.6 | |
| Norway | 12.4 | 6.2 | – | – | |
| Net amount in the balance sheet (obligation +, asset –) | 195.1 | 186.2 | 17.6 | 16.6 | |
| Group | |||||
| Changes in the obligation for defined benefit plans recognised in the balance sheet | 2011/2012 | 2010/2011 | |||
| Opening balance | 242.9 | 252.3 | |||
| Pensions earned during the period | 7.1 | 7.4 | |||
| Interest on obligations | 9.7 | 9.5 | |||
| Benefits paid | -7.7 | -8.9 | |||
| Actuarial gain or loss | 13.7 | -13.4 | |||
| Disposal of companies | – | -4.8 | |||
| Liabilities paid | – | – | |||
| Acquisitions of companies | 13.4 | – | |||
| Translation effects | 2.0 | -2.0 | |||
| Other | 0.0 | 2.8 | |||
| Present value of pension obligations | 281.1 | 242.9 | |||
| Group | |||||
| Changes in plan assets | 2011/2012 | 2010/2011 | |||
| Opening balance | 34.2 | 33.8 | |||
| Funds contributed by employer | 5.4 | 4.0 | |||
| Benefits paid | -1.6 | -3.3 | |||
| Expected return on plan assets | 2.3 | 1.7 | |||
| Acquisitions of companies | 7.0 | – | |||
| Actuarial gain or loss | -0.6 | -0.1 | |||
| Translation effects | 1.3 | -1.3 | |||
| Other | 1.5 | -0.6 | |||
| Fair value of plan assets | 49.5 | 34.2 | |||
| The year’s change in unrecognised actuarial gains (+) and losses (–) with regard to obligations | 2011/2012 | 2010/2011 | 2009/2010 | 2008/2009 | 2007/2008 |
| Changes in actuarial assumptions | 3.8 | -8.1 | -6.1 | 21.9 | 12.5 |
| Experience-based changes | 9.9 | -5.2 | -4.2 | 3.2 | -1.0 |
| Total | 13.7 | -13.3 | -10.3 | 25.1 | 11.5 |
| Group | Parent Company | ||||
| Pension costs | 2011/2012 | 2010/2011 | 2011/2012 | 2010/2011 | |
| Defined-benefit pension plans | |||||
| Cost for pensions earned during the year | 7.1 | 7.4 | – | -0.1 | |
| Interest expense | 9.7 | 9.5 | 0.8 | 0.8 | |
| Expected return on plan assets | -2.3 | -1.7 | – | – | |
| Recognised actuarial gains (–) and losses (+) | 0.1 | 1.4 | – | – | |
| Total cost of defined benefit plans | 14.6 | 16.6 | 0.8 | 0.7 | |
| Total cost of defined contribution plans | 70.3 | 66.2 | 2.9 | 2.9 | |
| Social security costs on pension costs | 12.2 | 11.6 | 0.8 | 0.9 | |
| Total cost of benefits after termination of employment | 97.1 | 94.4 | 3.7 | 4.5 | |
| Group | |||||
| Allocation of pension costs in the income statement | 2011/2012 | 2010/2011 | |||
| Cost of sales | 14.8 | 13.4 | |||
| Selling and administrative expenses | 74.9 | 73.2 | |||
| Net financial items | 7.4 | 7.8 | |||
| Total pension costs | 97.1 | 94.4 | |||
| 2011/2012 | 2010/2011 | ||||
| Actuarial assumptions | Sweden | Norway | Sweden | Norway | |
| The following material actuarial assumptions were applied in calculating obligations: | |||||
| Discount rate, 1 April, % | 3.80 | 4.00 | 3.80 | 4.00 | |
| Discount rate, 31 March, % | 3.70 | 2.60 | 3.80 | 4.00 | |
| Expected return on plan assets, % | 3.70 | 4.10 | 4.50 | 5.40 | |
| Future salary increases, % | 2.00 - 3.50 | 3.50 | 2.00 - 3.50 | 4.00 | |
| Future increases in pensions (change in income base amount), % | 3.00 | – | 3.00 | – | |
| Employee turnover, % | 10.00 | 2.00 - 5.00 | 10.00 | 2.00 - 5.00 | |
| Expected ‘G regulation’, % | – | 3.25 | – | 3.75 | |
| Mortality table | FFFS 2007:31 | K2005 | FFFS 2007:31 | K2005 | |
The discount rate used is equivalent to the interest rate on high-quality corporate bonds or government bonds with a maturity equivalent to the average maturity of the obligation and the currency. For Swedish pension liabilities, the interest rate for Swedish housing bonds is used as a basis and for Norwegian pension liabilities, the interest rate for Norwegian government bonds is used. In the preceding year, the interest rate on government bonds was used as a basis for Swedish pension liabilities. Future increases in pensions are based on inflation assumptions. Remaining period of employment (life expectancy) is based on statistical tables prepared by Finansinspektionen (Sweden's Financial Supervisory Authority) and the Insurance Society, in Sweden FFFS 2007:31 and in Norway K2005. Expected G regulation is used in the calculations in Norway and corresponds to Sweden's base amount.