BOOSTING OUR BUSINESS

Notes
Cont.Note
21
Funded defined benefit pension plans
For Group employees in Switzerland, commitments exist in the form of
compulsory service pension plans funded through insurance policies in
the Swiss Life Collective BVG Foundation and in Transparenta BVG
Foundation. The funded commitments currently amount to SEK 268
M (202), and the fair value of the assets under management is SEK
181 M (148). Consequently, the net pension liability is SEK 87 M
(54). The pension commitment is funded through insurance contracts.
During the year Intrum Justitia paid SEK 15 M (11) to the plan,
while disbursements to retirees amounted to SEK 32 M (39). In 2016
payments to the plan are estimated at SEK 14 M, with disbursements
to retirees of SEK 15 M. For these pension plans, a discount rate of
0.75 percent is applied. An increase/decrease in the discount rate by 0.5
percentage points would entail the pension liability decreasing by 8.8
percent/increasing by 10.2 percent.
For the Group’s employees in Norway, there are commitments for a
compulsory service pension, which are secured through insurance with
the insurance company Storebrand Livforsikring. The funded commitments
currently amount to SEK 70 M (68), and the fair value of the
assets under management is SEK 52 M (57). Consequently, the net
pension liability is SEK 18 M (11). The pension commitment is funded
through insurance contracts. During the year Intrum Justitia paid SEK
1 M (1) to the plan, while disbursements to retirees amounted to SEK
2 M (1). Even in 2016, payments to the plan are estimated at SEK 1 M,
with disbursements to retirees of SEK 1 M. For these pension plans,
a discount rate of 1.9 percent is applied.
ITP 2 plan
The commitments for retirement and family pensions for the Group’s
Swedish employees are secured through insurance with Alecta according
to the so-called ITP 2 plan. According to a statement from
the Swedish Financial Reporting Board, UFR 10, the ITP 2 plan is a
multi-employer defined benefit plan. For the fiscal year, Alecta’s clients
have not been provided enough information to report the plan as defined
benefit. Nor is there a contractual agreement how surpluses and
deficits in the plan are to be distributed among plan participants. The
ITP 2 plan secured through insurance with Alecta is therefore reported
by Intrum Justitia as if it were a defined contribution plan. At year-end
Alecta’s surplus in the form of the collective funding ratio amounted
to 153 percent (143). The collective funding ratio consists of the market
value of Alecta’s assets as a percentage of the insurance obligations
calculated according to Alecta’s actuarial assumptions, which do not
conform to IAS 19.
Under the provisions of the ITP 2 plan, measures must be taken if
the funding ratio falls below 125 percent (for example, in connection
with an increase in the price of the subscription) or exceed 155 percent
(for example, in connection with a premium reduction).
NOTE 22: Other provisions
Group
SEK M 2015 2014
Opening balances 3 3
Closing balances 3 3
NOTE 23: Borrowing
Group
Parent Company
SEK M 2015 2014 2015 2014
Long-term liabilities
Bank loans 2,340 1,727 2,340 1,726
Bond loan 3,124 3,231 3,124 3,232
Current liabilities
Commercial papers 635 728 635 728
Bank overdraft facilities 16 85 16 85
Short-term liabilities 1 – – –
Total 6,117 5,771 6,115 5,771
Intrum Justitia AB signed a three-year syndicated loan facility totaling SEK
7,500 M with Nordea Bank AB and Swedbank on December 23, 2015, to
replace the previous one from 2014. The loan limit of SEK 7,500 M can be
utilized for borrowing in a number of different currencies.
During 2015, Intrum Justitia AB issued no bonds under the Company’s
MTN program, compared to SEK 1,000 M in the preceding year.
On December 31, 2015, the loan framework had been utilized for
loans in SEK totaling SEK 500 M (0), in CHF totaling CHF 5 M (12),
in EUR totaling EUR 115 M (75), in NOK totaling NOK 250 M (200)
and in PLN totaling PLN 240 M (330). The unutilized portion of the
facilities amounted to SEK 5,141 M (3,250).
The loan carries a variable interest rate based on the interbank rate
in each currency, with a margin. The loan facility contains a number of
operations-related and financial covenants, including limits on certain
financial indicators. All such conditions were met throughout 2015 and
on December 31, 2015. In addition, the credit agreement includes covenants
that may restrict, condition or prohibit the Group from incurring
additional debt, making acquisitions, disposing of assets, making capital
and finance lease expenditures, allowing assets to be encumbered,
changing the scope of the Group’s business and entering into a merger
agreement.
In 2015, Intrum Justitia also issued a commercial paper that, at the
end of the year, amounted to SEK 635 M (728).
Group Parent Company
SEK M 2015 2014 2015 2014
Maturities of long-term bank borrowings
Between 1 and 2 years 1,034 – 1,034 –
Between 2 and 3 years 1,852 1,760 1,851 1,760
Between 3 and 4 years 1,799 1,799 1,798 1,799
Between 4 and 5 years 779 1,399 779 1,399
Total 5,464 4,958 5,464 4,958
Unused lines of credit excluding guarantee facility
Expiring within one year – – – –
Expiring beyond one year 5,141 3,250 5,141 3,250
Total 5,141 3,250 5,141 3,250
Long-term provisions are expected to be settled later than in 2016.
These provisions relate to the costs of restoring the company’s former
premises in the UK. Intrum Justitia guarantees the current tenant’s
contractual obligations.
66 Intrum Justitia Annual Report 2015