Review of 2010 – USD version - Skanska

Note
28 Continued
The ITP 1 occupational pension plan in Sweden is a defined-contribution plan. Skanska
pays premiums for employees covered by ITP 1, and each employee selects a manager.
The Company offers employees the opportunity to select Skanska as the manager. For
employees who have selected Skanska as their manager, there is a guaranteed minimum
amount that the employee will receive upon retirement. This guarantee means that the
portion of the ITP plan for which Skanska is the manager is recognized as a defined-benefit
plan. The net amount of obligations and plan assets for ITP 1 managed by Skanska is
recognized in the Company’s statement of financial position.
The ITP 2 occupational pension plan in Sweden is a defined-benefit plan. A small
portion is secured by insurance from the retirement insurance company Alecta. This is
a multi-employer insurance plan, and there is insufficient information to report these
obligations as a defined-benefit plan. Pensions secured by insurance from Alecta are
therefore reported as a defined-contribution plan. Since the same conditions apply to
the new AFP plan in Norway, it is also reported as a defined-contribution plan.
Defined-contribution plans
These plans mainly cover retirement pension, disability pension and family pension. The
premiums are paid regularly during the year by the respective Group company to separate
legal entities, for example insurance companies. The size of the premium is based
on salary. The pension expense for the period is included in the income statement.
Obligations related to employee benefits, defined-benefit plans
Pension obligations and plan assets by country
Sweden
Norway
United
Kingdom
2010
Pension obligations 711.2 392.8 654.3 1,758.2
Total
Plan assets –532.4 –401.3 –655.2 –1,588.9
Net liability according to statement
of financial position 178.7 –8.5 –0.9 169.3
2009
Pension obligations 719.7 366.2 636.6 1,722.5
Plan assets –479.7 –348.4 –585.8 –1,413.9
Net liability according to
statement of financial position 240.0 17.8 50.8 308.6
Total pension expenses in the income statement
2010 2009 2008 2007 2006
Pension obligations, funded
plans, present value on
December 31 1,758.2 1,722.5 1,468.3 1,736.0 1,586.9
Plan assets, fair value,
December 31 –1,588.9 –1,413.9 –1,066.9 –1,557.2 –1,360.2
Net liability according to
statement of financial
position 169.3 308.6 401.4 178.8 226.8
2010 2009
Pensions earned during the year –70.9 –87.5
Less: Funds contributed by employees 1.7 3.3
Interest on obligations –73.0 –70.4
Expected return on plan assets 81.2 65.7
Curtailments and settlements 1 16.1 28.5
Pension expenses, defined-benefit plans –45.0 –60.5
Pension expenses, defined-contribution plans –114.6 –124.8
Social insurance contributions, defined-benefit and
defined-contribution plans 2 –12.5 –15.9
Total pension expenses –172.0 –201.2
1 In 2010: Refers to changed conditions for pension plans in Norway. In 2009: Refers mainly to
changed conditions for a pension plan in the U.K.
2 Refers to special payroll tax in Sweden and employer fee in Norway.
Allocation of pension expenses in the income statement
Actuarial gains and losses recognized under other comprehensive income
Pension obligations
2010 2009
January 1 1,722.5 1,468.3
Pensions earned during the year 70.9 87.5
Interest on obligations 73.0 70.4
Benefits paid by employers –28.3 –23.4
Benefits paid from plan assets –29.0 –21.4
Reclassifications 1.9 –1.3
Actuarial gains (-), losses (+) during the year –50.9 12.3
Curtailments and settlements –16.1 –33.1
Exchange rate differences 14.2 163.0
Pension obligations, present value 1,758.2 1,722.5
Plan assets
2010 2009
January 1 1,413.9 1,066.9
Expected return on plan assets 81.2 65.7
Funds contributed by employers 55.8 73.7
Funds contributed by employees 1.7 3.3
Benefits paid –29.0 –21.4
Reclassifications 1.9
Actuarial gains (+), losses (–) during the year 54.5 102.4
Curtailments and settlements –4.6
Exchange rate differences 8.9 127.8
Plan assets, fair value 1,588.9 1,413.9
Amounts contributed are expected to total about USD 60.0 M during 2011 through
payments to funds in Norway and the United Kingdom.
Reconciliation of interest-bearing pension liability
2010 2009 2008 2007 2006
January 1 –451.1 –541.3 –172.1 –189.1 –277.4
Actuarial gains and losses on pension
obligations 1 50.9 –12.3 –119.6 26.5 63.3
Difference between expected and
actual return on plan assets 54.5 102.4 –249.6 –9.5 24.9
Accumulated –345.7 –451.1 –541.3 –172.1 –189.1
1 Allocation of changed assumptions and experience-based changes:
2010 2009
Cost of sales –134.4 –170.5
Selling and administrative expenses –45.8 –26.0
Financial items 8.2 –4.7
Total pension expenses –172.0 –201.2
2010 2009 2008 2007
Changed assumptions 38.0 17.4 –98.0 70.2
Experience-based changes 12.9 –29.7 –21.5 –43.7
Total actuarial gains and losses on
pension obligations 50.9 –12.3 –119.6 26.5
See also Note 26, which shows the tax portion and social insurance contributions
recognized under other comprehensive income.
2010 2009
Pension liabilities, January 1 308.6 401.4
Pension expenses 61.0 89.0
Benefits paid by employers –28.3 –23.4
Funds contributed by employers –55.8 –73.7
Reclassifications –1.3
Actuarial gains (–), losses (+) during the year –105.4 –90.2
Curtailments and settlements –16.1 –28.5
Exchange rate differences 5.3 35.2
Net liability according to statement of
financial position 169.3 308.6
134 Notes, including accounting and valuation principles Skanska Review of 2010 – USD version