Our performance in 2009 - Sappi

27. Post-employment benefits – pensions
Defined-contribution plans
2009 annual report
The group operates defined-contribution schemes of various sizes for all qualifying employees in most regions throughout
the group. The assets of the schemes are held separately from those of the group in funds under the control of trustees. In
addition, the group participates in country-wide union/industry schemes in certain locations open to eligible employees. The
number of schemes increased following an acquisition during the year.
The total cost charged to profit or loss of US$33 million (September 2008: US$23 million; September 2007: US$18 million)
represents contributions payable to these schemes by the group, based on the rates specified in the rules of these schemes.
As at September 2009, US$2 million (September 2008: US$2 million; September 2007: nil) was the net position of
contributions in the current reporting period that had not yet been paid over to the schemes and prepayments made for
contributions due in the next fiscal year.
Defined-benefit plans
The group operates 14 principal defined-benefit plans plus a number of smaller plans. The number of plans has increased
following an acquisition during the year. This includes plans closed to new entrants and plans closed to future accrual for
existing members. Plans still open to new entrants or future accrual, cover all qualifying employees. All plans have been
established in accordance with applicable legal requirements, customs and existing circumstances in each country. Plans
remain open to new members except for the following: Plans in Southern Africa, Austria, some in Germany and one in North
America are closed to new entrants. Schemes in the UK are closed to future accrual.
Benefits are generally based upon compensation and years of service, with varying definitions of compensation such as
average salary close to retirement or career average salary. Exceptions are for some of our German and Austrian plans
which provide fixed benefits and some of our North American plans that provide benefits based on years of service and a
‘$ multiplier’, which historically has increased from time to time. Our pension plan in Switzerland is a defined contribution
plan with guaranteed minimum investment returns and pays pensions. The scheme has a liability under IAS19 which is
disclosed with other defined benefit plan liabilities in this note.
With the exception of our German and Austrian plans (which are unfunded), the assets of these plans are held in separate
trustee administered funds, which are subject to varying statutory requirements in the particular countries concerned. In
terms of these requirements, periodic actuarial valuations of these funds are performed by independent actuaries. Actuarial
valuations of the European and North American funds are performed annually. Actuarial assessments on the funding bases
are performed triennially for the South African and United Kingdom funds.
As at September 2009, the number of active members in plans is approximately 8,000.
Group companies have no other significant post employment benefit liabilities, except for the following:
– healthcare benefits provided to persons in North America and in South Africa (refer to note 28); and
– jubilee (long service award schemes) provided in continental Europe, an early retirement (termination) plan in Belgium and
ATZ liabilities in Germany totalling US$36 million (included within other non-current liabilities in note 21).
All obligations and assets were measured at the end of this financial year.
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financials