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 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).

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 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.