Annual and Sustainability Report 2011 - Teracom

Note 7. Pensions
A majority of the Group's employees are primarily covered by defined benefit
pension plans, which means that they are guaranteed a pension that corresponds
to a certain percentage of their salary. The pension plans include
a retirement pension, a disability pension and a survivor pension. Employees
of Boxer TV-Access AB are entitled to pension benefits in accordance with
the ITP pension plan, which is secured through insurance with Alecta. Other
employees within the Group in Sweden are covered by the ITP-Tele pension
plan. Pension obligations are calculated annually as per the reporting date,
based on actuarial assumptions. Pension obligations are secured through provisions
in the balance sheet and through insurance premiums.
In Finland, employees are entitled to statutory pensions benefits in accordance
with Finnish legislation on pensions for employees, a defined benefit
pension plan (TEL pension). Pension benefits are secured through insurances
and they are not covered by IAS 19. Employees in Denmark are covered by
a defined contribution pension plan. Pension benefits are secured through
insurances.
In addition to the ITP plan, there is a pension liability that Teracom AB
assumed from the former Swedish PTT when it was incorporated in 1992.
The liability consists of a non-vesting portion and a vesting portion. The nonvesting
portion was terminated on 2011-12-31 since all employees with this
type of agreement retired in 2011. The remaining vesting portion refers to
retirement pensions. Employees hired after incorporation have an insuranceonly
solution as of 65 years of age. Retirement pensions to employees who
have been invited to take early retirement are secured through provisions in
the balance sheet or insurances and are paid as a retirement pension until the
person reaches 65 years of age.
Actuarial gains and losses are taken up as income over the employee’s
remaining period of employment to the extent that the total gain or loss per
plan falls outside the 10 percent corridor corresponding to the higher of the
pension obligation or the fair value of the plan assets for each plan, respectively.
The cost related to service during the current year refers to the capital
value of earned pension benefits during the year as calculated by the Projected
Unit Credit Method.
Total pension expenses are distributed as follows:
Group
Pension expense for the period 2011 2010 Forecast 2012
Cost related to service during the current year 7 11 9
Interest expense 20 18 19
Expected return on plan assets -13 -12 -13
Change in asset reduction (IAS 19.58b) -25 27 0
Actuarial profit/loss (+/-) to report for the year 28 -22 4
Cost regarding service from prior periods 1 0 0
Total cost for defined benefit plans 18 22 19
Pension expense to report in the income statement 18 22 19
Other effects to report in the income statement
Reductions, profit/loss (-/+) -1 -9 0
Total -1 -9 0
Detailed description of pension obligations and pension expense
Pension obligations, plan assets and receivables/provisions for pension obligations
as well as actuarial gains/loss for defined benefit pension plans have
developed as follows:
Group
Pension liability 2011 2010 Forecast 2012
Present value of wholly or partially funded obligations (+) 485 389 498
Fair value of plan assets -439 -424 -452
Net value of wholly or partially funded obligations (+/-) 46 -35 46
Present value of unfunded obligations (+) 4 8 1
Present value of net obligation (+/-) 50 -27 47
Unaccounted actuarial gain/loss (+/-) -111 -51 -106
Effect of the limitation rule for net assets 2 27 1
Pension liability/asset to report in the balance sheet -59 -51 -58
Present value of defined benefit plans 2011 2010 Forecast 2012
Present value of the obligation on 1 January 397 494 489
Cost related to service during the current period 7 11 9
Interest expense 20 18 19
Paid remuneration -19 -21 -18
Cost regarding service from prior periods 1 0 0
Reductions and adjustments -1 -10 0
Actuarial profit/loss on the obligation (+/-) 84 -95 0
Present value of the obligation on 31 December 489 397 499
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