SECURITAS AB Annual Report 2011

ACTUARIAL GAINS (–) AND LOSSES (+) AND EFFECTS OF MINIMUM FUNDING REQUIREMENT RECOGNIZED IN OTHER COMPREHENSIVE INCOME
MSEK 2011 2010 2009
Actuarial gains and losses before taxes 1 428.3 133.1 -23.4
Effects of minimum funding requirement -33.6 33.6 –
Total actuarial gains and losses and effects of minimum funding requirement related to defined benefit plans 394.7 166.7 -23.4
Actuarial gains and losses on reimbursement rights before taxes 11.9 – –
Taxes -136.3 -48.8 7.2
Total actuarial gains and losses and effects of minimum funding requirement
after taxes accounted for in other comprehensive income 270.3 117.9 -16.2
1 Per December 31, 2011 accumulated actuarial gains and losses before taxes amounted to MSEK 1 455.2 (1 026.9 and 893.8).
MAIN ACTuARIAL ASSuMPTIONS
The table above shows the main actuarial assumptions as of December 31,
2011, 2010 and 2009 used to value the defined benefit obligations at the
end of 2011, 2010 and 2009 as well as in determining the pension cost for
2012, 2011 and 2010.
Note 32. Other long-term provisions
The movement in the balance sheet for provisions for pensions and similar commitments is provided in note 31.
The movement in the balance sheet for deferred tax liabilities is provided in note 15.
DECEMBER 31, 2011
MSEK Claims reserves Provisions for taxes
2011 2010 2009
Percent (per annum) uSA Eurozone Other countries uSA Eurozone Other countries uSA Eurozone Other countries
Discount rate 1 3.65–4.10 3.25–4.75 2.35–5.50 4.60–5.20 4.50–5.00 4.00–5.75 5.75 4.50–5.25 4.50–7.00
Expected return on plan assets 7.90 4.75 3.85–5.15 8.50 5.00 5.40–5.75 8.50 3.80 5.70–6.50
General salary increases 2 n / a 2.00–2.75 2.00–4.00 n / a 2.00–2.75 3.50–4.50 n / a 2.00–2.75 3.75–4.60
Inflation 2 n / a 1.75–2.00 1.00–3.00 n / a 1.75–2.00 2.50–3.50 n / a 1.75–2.00 2.50–3.60
Pension increases 2 n / a 0.00–1.75 0.00–3.25 n / a 0.00–1.75 1.30–3.50 n / a 0.00–1.75 1.40–4.25
Healthcare cost inflation 3 n / a n / a 2.00–9.58 n / a n / a 2.00–9.58 n / a n / a 2.00–9.60
1 In the USA, the discount rate is derived from the full Citigroup yield curve, using a cash flow matching
approach. In the Eurozone, the discount rate is based on Iboxx Euro AA indices of appropriate term and
adjusted for the duration of the obligations. The material plans in the category Other countries are Norway
(government bonds adjusted for the duration of the obligations), Switzerland (discount rates produced
by the Chamber of Pensions Actuaries), the United Kingdom (Iboxx £ AA 15 year +) and Canada (single
discount rate derived from the Mercer Canada Yield Curve for high quality corporate bonds).
2 Plans in the USA are non-inflation-linked cash balance plans which are closed for future benefit accrual.
3 Related to healthcare plans in Canada. The assumption represents the range of current expected
healthcare cost inflation for the different benefits. This range is expected to fall to 2.00–4.50 percent
(depending on benefit type) by 2024.
As of December 31, 2011 the following assumptions were used for the
major plans in Securitas concerning mortality: USA – “RP-2000 mortality
tables projected to 2011”. Norway – tables in series “K2005”. Canada –
“UP-1994 mortality table with generational improvements”. Switzerland
– mortality table LPP2010. These tables have been established for use
after consultation with the company’s actuaries and reflect Securitas’ view
concerning future mortality experience.
Spain – overtime
compensation Other provisions Total
Opening balance 461.3 164.7 122.6 232.9 981.5
Reclassification -43.9 – – 61.0 17.1
New / increased provisions 6.6 36.7 – 33.4 76.7
utilized provisions – -8.0 -17.5 -12.1 -37.6
Reversal of unutilized provisions -18.7 -0.3 – -23.6 -42.6
Translation differences 5.2 1.9 -1.1 -1.4 4.6
Closing balance 410.5 195.0 104.0 290.2 999.7
Claims reserves
Liability insurance-related claims reserves primarily consist of provisions for
the portion of claims payable by the Group, that is its self-retention. Claims
reserves comprise a large number of individual insurance cases where some
cases are compensated with a lump-sum payment and others are paid over
a longer period of time. It is thus not possible to disclose any detailed information
regarding the timing of outflows from claims reserves.
Annual Report
Notes and comments to the consolidated financial statements
Provisions for taxes
Provisions for taxes primarily consist of provisions related to ongoing tax
audits. Tax audits are often lengthy processes that go on for several years.
It is thus not possible to disclose any detailed information regarding the
timing of outflows from taxes.
Spain – overtime compensation
All major security companies in Spain have been compensating their
employees in respect of overtime work in accordance with a labor agreement
covering the period 2005 to 2008. In February 2007, the Spanish
Supreme Court ruled that the overtime compensation under the existing
labor agreement was not in compliance with Spanish law.
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