Annual Report 2008 - 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 definedbenefit
plan. The net amount of obligations and plan assets for ITP 1 managed by Skanska
is recognized in the Company’s balance sheet. This net amount was marginal, since
payments into this portion of the plan began late in 2008.
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.
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
2008 2007 2006
Pension obligations, funded plans, present
value on December 31 11,340 11,157 10,888
Plan assets, fair value, December 31 –8,240 –10,008 –9,332
Net liability according to balance sheet 3,100 1,149 1,556
Pension obligations and plan assets by country
Sweden
Norway
United
Kingdom
United
States 1
2008
Pension obligations 4,753 2,405 4,182 11,340
Total
Plan assets –3,070 –1,763 –3,407 –8,240
Net liability according
to balance sheet 1,683 642 775 3,100
2007
Pension obligations 4,176 2,104 4,347 530 11,157
Plan assets –3,371 –2,046 –4,157 –434 –10,008
Net liability according
to balance sheet 805 58 190 96 1,149
1 Defined-benefit plans in the United States were settled during 2008.
Total pension expenses in the income statement
2008 2007
Pensions earned during the year –554 –566
Less: Funds contributed by employees 27 30
Interest on obligations –517 –477
Expected return on plan assets 618 569
Pension expenses, defined-benefit plans –426 –444
Allocation of pension expenses in the income statement
Actuarial gains and losses recognized directly in equity
2008 2007 2006 2005 2004
January 1 –1,295 –1,410 –2,061 –590 0
Actuarial gains and losses on pension
obligations 1 –788 179 467 –2,098 –766
Difference between expected and
actual return on plan assets –1,645 –64 184 627 176
Accumulated –3,728 –1,295 –1,410 –2,061 –590
1 Allocation of changed assumptions and experience-based changes:
Pension obligations
2008 2007
Cost of sales –1,157 –1,029
Selling and administrative expenses –332 –330
Financial items 101 92
Total pension expenses –1,388 –1,267
2008 2007 2006
Changed assumptions –646 474 296
Experience-based changes –142 –295 171
Total actuarial gains and losses on
pension obligations –788 179 467
See also “Consolidated statement of recognized income and expenses,” which shows
the tax portion and social insurance contributions recognized directly in equity.
2008 2007
January 1 11,157 10,888
Pensions earned during the year 554 566
Interest on obligations 517 477
Benefits paid by employers –161 –156
Benefits paid from plan assets –230 –182
Reclassifications 5 –33
Actuarial gains (–), losses (+) during the year 788 –179
Curtailments and settlements –552 –142
Exchange rate differences –738 –82
Pension obligations, present value 11,340 11,157
Plan assets
2008 2007
January 1 10,008 9,332
Expected return on plan assets 618 569
Funds contributed by employers 510 479
Funds contributed by employees 27 30
Benefits paid –230 –182
Reclassifications 24 72
Actuarial gains (+), losses (–) during the year –1,645 –64
Curtailments and settlements –439 –142
Exchange rate differences –633 –86
Plan assets, fair value 8,240 10,008
Funds contributed are expected to total about SEK 600 M during 2009
through payments to funds in Norway and the United Kingdom.
Pension expenses, defined-contribution plans –882 –732
Social insurance contributions, defined-benefit and
defined-contribution plans 1 –80 –91
Total pension expenses –1,388 –1,267
1 Refers to special payroll tax in Sweden and employer fee in Norway.
Skanska Annual Report 2008 Notes, including accounting and valuation principles 117