Annual and Sustainability Report 2011 - Teracom

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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 76
Return on plan assets 2011 2010 Forecast 2012 Expected return on plan assets 13 12 13 Actuarial profit/loss on the plan assets (+/-) -4 8 0 Actual return on plan assets 9 20 13 Plan assets 2011 2010 Forecast 2012 Fair value of plan assets on 1 January 424 401 439 Expected return on plan assets 13 12 13 Fees/premiums (+) 20 16 16 Paid remuneration (-) -14 -13 -16 Actuarial profit/loss (+/-) on plan assets -4 8 0 Fair value of plan assets on 31 December 439 424 452 Reconciliation of change in pension liability 2011 2010 Forecast 2012 Net liability/asset on 1 January -51 -40 -59 Pension expense for the period 18 22 19 Paid remuneration (-) -19 -21 -18 Fees, premiums (-) -20 -16 -16 Reimbursement (+) 14 13 16 Reductions and adjustments -1 -9 0 Net liability/asset on 31 December -59 -51 -58 2011 2010 Forecast 2012 Accumulated unaccounted actuarial profits /losses (+/-) on 1 January -51 -133 -111 Reported actuarial profits/losses (+/-) during the year 28 -22 5 Profit/loss (+/-) on obligation -84 95 0 Profit/loss (+/-) on plan assets -4 8 0 Profit/loss (+/-) on reductions and adjustments 0 1 0 Accumulated unaccounted actuarial profits /losses (+/-) on 31 December -111 -51 -106 Number entitled to pension on 1 January 2011 2010 Forecast 2012 Employees 504 512 519 Vested benefits 743 729 786 Retired persons 256 228 286 Total 1 503 1 469 1 591 Five-year overview 2011 2010 2009 2008 2007 Present value of the obligation (+) 489 397 494 454 478 Fair value of plan assets (-) -439 -424 -401 -371 -358 Present value of net obligation (+/-) 50 -27 93 83 120 Profit/loss (+/-) on the obligation, actual effects -4 7 -22 7 -7 Profit/loss (+/-) on plan assets, actual effects -4 8 -11 -14 3 Plan assets 2011 2010 2009 2008 2007 Insurance contract 439 424 401 371 358 The annual fees for pension insurance with Alecta (reported as a defined contribution plan) were SEK 2 (3) million. Alecta's surplus may be distributed amongst the policy holder(s) and/or the insured. As of 31 December 2011, Alecta's surplus in the form of the collective funding ratio amounted to 113 (146) percent. The collective funding ratio was calculated in accordance with IAS19. Actuarial assumptions The actuarial calculation of the Group’s pension obligations and pension costs is based on the following key assumptions stated as weighted averages for the various pension plans. A change in any of these fundamental assumptions can have a significant impact on calculated pension obligations, financing requirements and pension costs. Forecast Actuarial assumptions 2011 2010 2012 Discount rate (%) 3,90 5,00 3,90 Annual salary increase (%) 3,00 3,00 3,00 Increase in the income base amount (%) 3,00 3,00 3,00 Inflation/annual increase in pension benefits (%) 2,00 2,00 2,00 Termination rate (%) 3,00 3,00 3,00 Expected remaining term of service (years) 17,8 18,8 17,2 Expected return on plan assets (%) 3,00 3,00 3,00 Discount rate The interest rate used to discount both funded and unfunded obligations for post-employment remuneration. When establishing the discount rate, consideration is given to the market yield on mortgage bonds with the same maturities as the obligation as of the balance sheet date. Annual salary increase The assessment of the annual salary increase reflects anticipated future salary increases as a combined effect of inflation, period of service, promotion and other relevant factors such as supply and demand in the labor market. Increase in the income base amount The income base amount, set annually, is used to determine the pensionable income ceiling in the national pension system. The assessment is based on the anticipated rate of inflation and historical salary trend of the entire labor market. Inflation/annual increase in pension benefits The assumption is based upon the expected rate of inflation in the market. Termination rate Historical information has been used in order to make an assessment of the termination rate. Teracom has used this information to estimate the future termination rate. Expected remaining term of service The average expected remaining term of service. This calculation is based upon the age distribution for employees and the expected future rate of employee turnover. Expected return on plan assets The assessment is based on the average expected return on existing and future plan assets. 77
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Annual and Sustainability Report 20
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Read more about the Swedish busines
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Denmark has been and continues to b
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Teracom Group On 1 June, Teracom Gr
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An integrated TV business The Group
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digital radio and, in connection wi
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Subsidized public transportation en
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Sweden Sweden is the Group’s firs
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The market The competition primaril
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67 PR5 Customer satisfaction for Bo
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Denmark Denmark is the Group's youn
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Chris Corneliussen, Boxer Denmark
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Finland PlusTV is the largest Pay-T
Page 28 and 29: Kimi »The Iceman« Räikkönen is
Page 30 and 31: Sustainability - corporate responsi
Page 32 and 33: The Teracom Group’s sustainabilit
Page 34 and 35: The Group's breakdown of climate im
Page 36 and 37: Employees For the Teracom Group, hi
Page 38 and 39: Media plurality requires a long-ter
Page 40 and 41: Reporting in accordance with GRI gu
Page 42 and 43: GRI G3 Index Reference Comments 1.
Page 44: Contents 44 Directors’ Report 49
Page 47 and 48: Operating profit for the year amoun
Page 49 and 50: Diversity and equal opportunity Div
Page 51 and 52: Corporate Governance Report The Cor
Page 53 and 54: Teracom AB's 2011 AGM Teracom AB's
Page 55 and 56: Evaluation of the Board of Director
Page 57 and 58: ously striving to achieve long-term
Page 59 and 60: 1 2 3 4 5 6 7 8 9 10 11 12 Board of
Page 61 and 62: Consolidated Income Statement MSEK
Page 63 and 64: Consolidated Cash Flow Statement MS
Page 65 and 66: Parent Company Income Statement MSE
Page 67 and 68: Parent Company Cash Flow Statement
Page 69 and 70: Notes Contents Note Description Pag
Page 71 and 72: the Group conducts an impairment te
Page 73 and 74: No major changes will be made for f
Page 75 and 76: Note 4 Segment reporting The Group
Page 77: Notice period and severance pay The
Page 81 and 82: Note 13. Tax on profit for the year
Page 83 and 84: Note 16. Goodwill and other intangi
Page 85 and 86: Note 17. Other financial assets Gro
Page 87 and 88: Net investments of foreign operatio
Page 89 and 90: Financial derivative instruments Th
Page 91 and 92: Note 26. Shares and participations
Page 93 and 94: Auditors' report on overall review
Page 95: Responsibility of the auditor It is
Page 98 and 99: Technical definitions Broadcasting
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Annual and Sustainability Report 2011 - Teracom

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