Shareholders' Letter

10 Post-employment benefits
Defined benefit plans
Swisscom has a defined benefit plan for employees in Switzerland named “comPlan”. Further
defined benefit obligations exist for “Altrentner PUBLICA” and for Fastweb employees. Expenses
of defined benefit plans totalled CHF 139 million (prior year: CHF 163 million).
comPlan
The majority of Swisscom’s employees are insured for the risks of old age, death and disability by
its own pension plan, comPlan. The comPlan pension plan has the legal form of a foundation.
Retirement benefits are determined as a function of the individual retirement savings accounts
(accumulated retirement savings) at the time of retirement. The standard retirement age is 65.
The annual pension is calculated by multiplying the accumulated retirement savings at the date
of retirement by a conversion rate laid down in the rules of the foundation. If an employee retires
at the normal retirement age of 65, the savings are converted into a retirement pension at a rate
of 6.8%. Employees qualify for early retirement at the earliest on their 58th birthday, whereby the
rate of conversion is reduced in line with the longer pension expectancy and lower retirement savings.
Employees may choose to take their entire pension or part thereof in the form of a capital
payment. The regular employer contributions include risk contributions of 3% and contributions
in the form of credits to individual retirement savings of 5% to 13% of the insured salary, depending
on age. In addition, Swisscom also paid additional contributions of 3% of the insured salary from
2006 to 2010 in order to constitute reserves for fluctuations in the value of plan assets. In 2010,
these additional contributions aggregated CHF 52 million. In 2010, the Council of the Foundation
resolved to make several amendments to the plan which are designed to ensure financial stability
considering low interest rates and growing life expectancy. The amendments take effect in 2011
and encompass measures affecting pension benefits as well as contributions. In particular, the
level of future retirement benefits for new pensioners will be decreased. The amendments to the
pension plan lead to a reduction in defined benefit obligations of CHF 142 million. Of this amount,
CHF 6 million was recorded as a gain on plan settlements and CHF 136 million as the unamortised
costs of retroactive changes to the pension plan. Of the gain on plan settlements, CHF 5 million
was recorded as a reduction of retirement benefit expense and CHF 1 million as a reduction of
unamortised actuarial losses.
Retired employees of PUBLICA
Former employees of Swisscom and the predecessor organisation PTT Telecom who retired before
1 January 1999 are insured with the Swiss Federal pension plan PUBLICA. Swisscom may decide
annually whether to grant extraordinary pension increases, if the increase in pensions cannot be
funded out of PUBLICA’s own reserves. Any extraordinary pension increases must be funded by
Swisscom through payment of sufficient covering funds. In order to evaluate the effective commitment,
it is assumed that Swisscom will finance pension increases of 0.1% per annum on a longterm
average. The defined benefit obligations for future pension payments, including pension
increases and administrative costs, are CHF 2,734 million gross (prior year: CHF 2,722 million). Of
this, obligations for pension increases and administrative costs amount to CHF 35 million (prior
year: CHF 35 million). Since Swisscom bears neither investment nor demographic risks (in particular
longevity risks), only the defined benefit commitments for future pension increases and
administrative costs are disclosed. However, the gross commitments of CHF 2,734 million are used
as a basis to determine the corridor for amortising the actuarial gains or losses. At 31 December
2010, included in the PUBLICA’s pension obligations are unrecognised actuarial gains of CHF 272
million (prior year: CHF 274 million). These are outside the corridor of 10%. In the prior year, the
difference of CHF 2 million was taken to income immediately.