Page 103 - Loomis Annual Report 2017

Loomis Annual Report 2017
Notes – Group 99
covers bene ts for pensions, disability pension and death in service. The pension bene ts in this plan are based on earned capital. The disability pension bene ts amount to a percent- age of pensionable remuneration, while the death bene ts are based on earned capital. The percentage of the premiums does not change as the individual ages and the full premiums are paid by the employer.
All of the pension plans in Switzerland are controlled by boards that consist of an equal number of representatives from the company and the employees. All of Loomis’ pension plans in Switzerland are reinsured with an external party. This means that all of the risks associated with the pension liability, includ- ing the investment risk, are covered by an insurance contract. Under this insurance contract the third party guarantees the funding level, which is calculated based on local laws, at a rate of 100 percent. The third party activity is regulated by federal Swiss legislation and all risk management activities are covered by the Swiss Solvency Test.
France
In France there are two unfunded plans, a Retirement indem- nity plan that represents approximately 11 percent (11) of the Group’s total commitments in respect of De ned bene t obli- gations as of December 31, 2017 and a Jubilee award plan
that represents approximately 1 percent (1) of the total commit- ments. The retirement indemnity plan provides a one-off lump sum retirement bene t to employees who retire from Loomis with ve or more years’ service. The size of the bene t is based on an employee’s years of service, their salary at retirement and their role at the company.
The requirement for a one-off retirement indemnity is a legal obligation. The bene t from the plan is xed by a collective bar- gaining agreement governed by industry representatives. A Council tribunal deals with any disputes between the employer and employees over the bene t payments. Bene ts are paid directly by the company as and when they arise. The plan is open to future accrual and new members.
The Jubilee award plan is an unfunded arrangement and is paid to employees upon completion of a certain number of years of service.
Other countries
In addition to the plans mentioned above, there is a funded de ned bene t plan in Norway that represent approximately
3 percent (3) of the Group’s total commitments in respect of De ned bene t obligations as of December 31, 2017. There are also unfunded de ned bene t plans in Austria that represent approximately 1 percent (1) of the Group’s total commitments as of December 31, 2017.
Sweden
Blue-collar employees of the Group in Sweden are covered
by the SAF-LO collective pension plan, which was negoti-
ated by the parties in the labor market for persons employed
in the private sector under collective agreements. The plan is a multi-employer de ned contribution arrangement. Professional employees of the Group are instead covered by the ITP plan, which is a collectively agreed plan for professional employees within the private sector. A number of years back ITP was split into ITP1 and ITP2. ITP1 is a multi-employer de ned contribu- tion plan. ITP2 is a de ned bene t plan which, according to a statement (UFR 10) issued by the Swedish Financial Reporting Board, is a multi-employer de ned bene t plan. Alecta, a mutual insurance company that manages the pension plan’s bene ts,
is unable to provide Loomis, or other Swedish companies, with suf cient information with which to determine an individual com- pany’s share of the total commitment and its plan assets. Con- sequently, the ITP pension plan that is secured by insurance
with Alecta is reported as a de ned contribution plan. The cost for 2017 amounted to SEK 19 million (18). The cost for 2018 is expected to be at a similar level. Alecta’s surplus may be dis- tributed to the policy holders and/or the insured. At the end of 2017, Alecta’s surplus in the form of the collective consolida- tion level amounted to 154 percent (149). The collective consol- idation level comprises the market value of Alecta’s assets as a percentage of the insurance commitments calculated in accor- dance with Alecta’s actuarial assumptions, which do not accord with IAS 19 IAS 19.
Membership Summary
As of December 31, 2017 the present value of the de ned bene t obligation was comprised as follows:
Liability Active members
(% of total obligation)
Liability Deferred members
(% of total obligation)
Liability Pensioner members
(% of total obligation)
Total
Pension plan duration (years)
Financial disclosures
The amounts recognized in the balance sheet are as follows:
Dec.31, 2017
France
Switzer- land
UK
Other coun- tries
100
67
–
92
–
–
54
–
–
33
46
8
100
100
100
100
14
17
19
19
Provisions for pensions and similar commitments, net
SEK m
Plans included in Interest-bearing nancial xed assets
Plans included in Provisions for pensions and similar commitments
Total provisions for pensions and similar commitments, net
Dec. 31, 2016
–13 799 786
Dec. 31, 2017
–18
766
748
The table below shows the total cost for de ned bene t plans in 2017 and 2016.
Pension costs
SEK m 2016
Current service costs 56
Administration costs (excluding investment
related expenses for funded plans) 7
Net interest cost/gain (–) 8 Recognized actuarial gains (–)/ losses 3
Past service costs/credits (–) & settle-
ments –5
Total pension costs 70
2017
51
6
9
1
0
67