Page 102 - Loomis Annual Report 2017

98
Notes – Group
Loomis Annual Report 2017
Provisions for pensions and similar
commitments
The Group operates, or participates, in a number of de ned bene t and de ned contribution pension plans and other long- term employee bene t plans. These plans are structured in accordance with local rules and practices. The overall cost of these plans for the Group is detailed in Note 10.
De ned contribution pension plans
A de ned contribution plan is a pension plan under which the Company pays xed contributions to a separate legal entity and to which it has no legal or informal obligations to pay further contributions.
In 2017 the cost for de ned contribution plans amounted to SEK 138 million (126).
De ned bene t pension plans
De ned bene t plans are pension plans providing bene ts after termination of service other than those bene ts provided by de ned contribution plans. Calculations for the de ned bene t plans are carried out by independent actuaries on a continuous basis. Costs for de ned bene t plans are estimated using the Projected Unit Credit method resulting in a cost distributed over the individual’s period of employment.
Summary of de ned bene t plans
The de ned bene t obligation and plan assets are composed by country as follows:
De ned bene t obligations as of December 31, 2017. The plan is a funded de ned bene t plan in which the assets are held separately from those of the employer. Under the Loomis UK pension scheme, employees are entitled to annual pensions paid directly from the scheme on retirement which are calcu- lated as a percentage of the member’s nal pensionable salary multiplied by number of years of service. In payment, the pen- sion is increased annually with increases typically being linked to in ation capped at a certain level. Bene ts are also payable on death and following other events such as withdrawing from the scheme.
The scheme is administrated by a board of Trustees which is legally separated from the Company. The board of Trust- ees are composed of representatives both from the employer and employees and is chaired by an Independent Trustee. The board of Trustees are required by law to:
Act in the best interest of all bene ciaries of the scheme Ensure the scheme is operated in accordance with its Rules
and statutory requirements i.e the general law of trusts and speci c UK law applying to pension schemes, including Acts of Parliament and regulations.
Be responsible for the investment strategy of the scheme’s assets and
Be responsible for the day-to-day administration of the bene ts.
The board of Trustees rely on professional advice to help them meet the requirements stated above.
Under UK Regulations, the company and the board of Trust- ees must agree what contributions should be paid into the scheme after receiving advice from an actuary.
The UK pension scheme is required to perform a funding val- uation every third year. The scheme has, since March 3, 2013 been closed for future accrual.
The Company and the board of Trustees are working together to help ensure the UK scheme’s investment risk are reduced as and when appropriate. This includes holding a diversi ed asset portfolio to ensure there is no concentrated risk in one market, asset class or region.
Loomis AB has also provided a guarantee of GBP 50 million to the pension scheme to further show its commitment to meet any obligations that the scheme provides to its members.
Loomis UK also participates in various de ned contribution pension plans.
Switzerland
In Switzerland there are three funded pension schemes which, combined, constituted around 26 percent (28) of the Group’s total commitments as of December 31, 2017. The Swiss pen- sion schemes are funded so that the assets in the schemes consist of assets in pension funds that are separate from
the other assets of the entities. The Swiss pension schemes
are open to new employees and bene ts are accrued in the schemes. There are no previous employees as members with vesting rights in the schemes because the pension liability goes to the new employer when employment ends. Two of the pen- sion schemes include pension bene ts, disability pension, and bene ts in the event of death in service for surviving spouses and children. The pension bene ts in these schemes are based on earned capital multiplied by a conversion rate that is different for men and women. The disability pension bene ts amount to
a percentage of the pensionable salary. The death bene ts and bene ts for surviving spouses are calculated on the pension- able salary while the survival coverage for children for one of the plans is based on a percentage of the anticipated pension capital and for the other plan, based on the pensionable salary. Premiums increase with age and are shared equally between the employer and the employee.
One of the Swiss pension plans, aimed at senior executives,
NOTE 30
Funded and unfunded bene t obligations
Dec. 31, 2017
France
Switzer- land
UK
Other coun- tries
Total
–
840
1,853
98
2,791
–
–590
–1,782
–73
–2,445
–
250
71
25
347
385
–
–
17
402
385
250
71
42
748
Funded plans
Present value of funded de ned bene t obligations
Fair value of plan assets
Funded plans, net
Unfunded plans
Present value of unfunded bene t obligations
Total funded and unfunded bene t obligations
Funded plans
France
Dec. 31, 2016
Other Switzer- coun- land UK tries
897 1846 90 –612 –1745 –69
Total
2,833 –2,428
Present value of
funded de ned bene t
obligations –
Fair value of plan assets –
Funded plans, net –
Unfunded plans
Present value of unfunded
bene t obligations 363
Total funded and unfunded
bene t obligations 363
285 101
– –
285 101
20 406
17 380
37 786
Below is a description of the most material de ned bene t pension plans:
UK
The Loomis UK Pension scheme represents approximately 58 percent (57) of the Group’s total commitments in respect of