Notes for P&L

All amounts in SEKm unless otherwise stated

Note 22 Provisions for pensions and similar obligations


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.

Defined benefit plans

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 9 percent (13) of the present value of the pension obligations.

The revised IAS 19, Employee benefits, is applicable as of 1 April 2013. The change involves the disappearance of the alternative of deferring actuarial gains and losses according to the corridor method. The standard also contains new rules regarding the recognition of special employer's contribution. As of 1 April 2013, Addtech's pension liabilities, which are recognised in the balance sheet, will thus increase by around SEK 39 million including special employer's contribution of around SEK 13 million.


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 2012/2013 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 16.5 million (13.6).

Defined contributions

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.

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Group Parent Company
Pension liability as per balance sheet 31 Mar 13 31 Mar 12 31 Mar 13 31 Mar 12
Pension liability PRI 179.9 175.3 17.1 17.6
Other pension obligations 21.3 19.8
Total 201.2 195.1 17.1 17.6
 
  Group Parent Company
Reconciliation of net amount for pensions in the balance sheet 2012/2013 2011/2012 2012/2013 2011/2012
Opening balance 195.1 186.2 17.6 16.6
Change in accounting for pensions 18.0 14.6 0.7 2.1
Payment of pension benefits -6.9 -6.3 -1.2 -1.1
Funds contributed by employer -6.0 -5.4
Acquisitions of companies 6.1
Translation effects -0.7 0.3
Other 1.7 -0.4
Net amount in balance sheet (obligation +, asset -) 201.2 195.1 17.1 17.6
   
Group
Return on plan assets 2012/2013 2011/2012
Actual return on plan assets     0.8 1.7
Expected return on plan assets     2.0 2.3
Actuarial gains/losses on plan assets during the period     -1.2 -0.6
         
Obligations for employee benefits, defined benefit pension plans    
Group Parent Company
Obligations for defined benefits and the value of plan assets 31 Mar 13 31 Mar 12 31 Mar 13 31 Mar 12
Wholly or partly funded obligations:        
Present value of defined benefit obligations 70.3 78.3
Fair value of plan assets -51.5 -49.5
Wholly or partly funded obligations, net 18.8 28.8
Present value of unfunded defined benefit obligations 206.9 202.8 17.1 17.6
Net obligations before adjustments 225.7 231.6 17.1 17.6
Adjustments:        
Accumulated unrecognised actuarial gains (+) and losses (–) -24.5 -36.5
Net amount in the balance sheet (obligation +, asset –) 201.2 195.1 17.1 17.6
The net amount is recognised in the following items in the balance sheet:  
Provisions for pensions and similar obligations 201.2 195.1 17.1 17.6
Net amount in the balance sheet (obligation +, asset –) 201.2 195.1 17.1 17.6
The net amount is divided among plans in the following countries:        
Sweden 186.3 182.7 17.1 17.6
Norway 14.9 12.4
Net amount in the balance sheet (obligation +, asset –) 201.2 195.1 17.1 17.6
     
Group
Changes in the obligation for defined benefit plans recognised in the balance sheet 2012/2013 2011/2012
Opening balance     281.1 242.9
Pensions earned during the period     9.2 7.1
Interest on obligations     9.6 9.7
Benefits paid     -7.7 -7.7
Actuarial gain or loss     -12.1 13.7
Acquisitions of companies     13.4
Translation effects     -2.9 2.0
Other     0.0 0.0
Present value of pension obligations     277.2 281.1
   
    Group
Changes in plan assets     2012/2013 2011/2012
Opening balance     49.5 34.2
Funds contributed by employer     6.0 5.4
Benefits paid     -1.0 -1.6
Expected return on plan assets     2.0 2.3
Acquisitions of companies     7.0
Actuarial gain or loss     -1.2 -0.6
Translation effects     -2.0 1.3
Other     -1.8 1.5
Fair value of plan assets     51.5 49.5
Group
The year’s change in unrecognised actuarial gains (+) and losses (–) with regard to obligations 2012/2013 2011/2012 2010/2011 2009/2010 2008/2009
Changes in actuarial assumptions 3.8 -3.8 8.1 6.1 -21.9
Experience-based changes 8.2 -9.9 5.2 4.2 -3.2
Total 12.0 -13.7 13.3 10.3 -25.1
Group Parent Company
Pension costs 2012/2013 2011/2012 2012/2013 2011/2012
Defined-benefit pension plans        
Cost for pensions earned during the year 9.2 7.1
Interest expense 9.6 9.7 0.7 0.8
Expected return on plan assets -2.0 -2.3
Recognised actuarial gains (–) and losses (+) 1.2 0.1
Total cost of defined benefit plans 18.0 14.6 0.7 0.8
Total cost of defined contribution plans 78.0 70.3 4.6 2.9
Social security costs on pension costs 13.0 12.2 1.2 0.8
Total cost of benefits after termination of employment 109.0 97.1 6.5 4.5
   
Group
Allocation of pension costs in the income statement     2012/2013 2011/2012
Cost of sales     14.6 14.8
Selling and administrative expenses     86.8 74.9
Net financial items     7.6 7.4
Total pension costs     109.0 97.1
2012/2013 2011/2012
Actuarial assumptions Sweden Norway Sweden Norway
The following material actuarial assumptions were applied in calculating obligations:    
Discount rate, 1 April, % 3.70 2.60 3.80 4.00
Discount rate, 31 March, % 3.60 3.85 3.70 2.60
Expected return on plan assets, % 3.60 3.85 3.70 4.10
Future salary increases, % 2,00-3,50 3.50 2,00 - 3,50 3.50
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 3.25
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 corporate bonds is used. In the preceding year, the interest rate on government bonds was used as a basis for Norwegian 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.