Pension plans and other long-term benefits

The LLB Group has established a number of pension plans in compliance with prevailing legal provisions, which insure most employees in the event of death, invalidity and retirement. These include both defined benefit and defined contribution plans. In addition, further plans exist for long-service anniversaries which qualify as other long-term employee benefits.

In the case of most of the pensions plans, contributions are made by employees, which are then supplemented by corresponding contributions from the LLB Group. The pensions schemes are financed in compliance with local legal and fiscal regulations.

Benefits are usually dependent on one or more factors such as the number of years the employee was covered in the plan, age, pensionable salary and to some extent on the accumulated old age capital. The assets of the funded pension plans are held within separate foundations or insurances and may not revert to the employer. The mortality rates specified in the Professional Pensions Law 2010 (BVG 2010) were employed to calculate the mortality, life expectancy and invalidity rates for all pension plans.

The benefit obligations for defined benefit pension plans were calculated using the «Projected Unit Credit Method». The «Traditional Unit Credit Method» was applied to some benefit obligations on account of the structuring of the retirement benefits. The last actuarial valuations were performed on 31 December 2012 and 31 December 2011.

The actuarial profits and losses are included directly in equity or other comprehensive income.

In spring 2012, LLB AG decided to change its pension fund model, which pursuant to IAS 19 led to plan changes and plan reductions. The change in the pension fund model was communicated to the LLB’s staff on 15 March 2012. For the business year 2012, the plan changes amounted to CHF 19.8 million and the plan reductions to CHF 3.7 million. In connection with the change in the pension fund model in 2012, the pension fund foundation of LLB AG was reorganized. Among other measures, an employer contribution of CHF 7.8 million was made in favour of the Personnel Pension Fund Foundation of LLB AG, which according to IAS 19 results in a reduction of the benefit obligation of CHF 7.8 million for the LLB Group.

The values shown in the following tables contain the non-current assets held for sale.

The following amounts are reported in the income statement as personnel expenses:

(XLS:)

 

Pension plans

Other long-term benefits

in CHF thousands

2012

2011

2012

2011

Current service cost

–18'037

–15'344

–831

–772

Interest on obligations

–11'487

–12'041

–164

–186

Expected return on plan assets

12'029

13'368

0

0

Gains/(losses) on curtailments

19'806

0

0

0

Net actuarial (losses) gains recognised

0

0

–217

–300

Prior service (cost)/gain

458

353

3'679

0

Service cost to be recognised immediately

0

0

0

0

Expense for defined benefit plans

2'769

–13'664

2'467

–1'258

Contributions to defined contribution plans

–93

–121

0

0

 

 

 

 

 

Actual return on plan assets

24'955

–1'281

0

0

Gains and losses reported in the consolidated statement of comprehensive income:

(XLS:)

 

Pension plans

in CHF thousands

2012

2011

As at 1 January

–94'025

–52'798

Actuarial gains/(losses) during the year

–10'152

–26'578

Asset gains/(losses)

12'941

–14'649

As at 31 December

–91'236

–94'025

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