Page 90 - EVRY Annual Report 2012

Annual Accounts Group 90
Pensions
The group provides pensions principally through insured collective schemes with life insurance companies. Pension
arrangements related at 31 December 2012 to 6,629 active employee members of defined contribution pension
schemes, 992 active employee members of insured defined benefit schemes and 575 pensioners. The presentation
of pension costs and pension liabilities set out below aggregates the various pension arrangements provided by the
group. The figures therefore include a number of different defined benefit, defined contribution and multi-compa-
ny pension schemes.
The group’s Norwegian companies operate a defined contribution pension scheme for employees. The annual
contributions to this scheme are at the rates of 4 % for salaries between one and six times the social security base
amount (G) and 8 % for salaries between 6 G and 12 G. The group’s defined benefit pension schemes in Norway are,
for all practical purposes, closed schemes that do not admit newly appointed employees. Pension benefit constitutes
66 % of salary. A compensation scheme was established in connection with termination of defined benefit pension
schemes in 2009, with the object of limiting the calculated loss in retirement pension capital incurred by employees
as a result of the transfer. The accrued compensation provision at 31 December 2012 was NOK 12.8 million excluding
employer’s social security contributions. The compensation scheme is financed from operations and will be paid
upon members achieving a retirement age of 67 in equal annual amounts over a 15-year period. The accrued entitle-
ment to compensation is held on a separate bank account that is pledged in favour of the members entitled to the
compensation. The pledged account arrangement is provided by Pensjons Tillitsmann AS, which monitors the
agreement.
The employees of the group’s Norwegian companies are members of the common scheme of AFP early retirement
pension arrangement.The scheme gives a lifelong supplement to the ordinary pension. Employees can choose
whether to draw the new AFP pension from 62 years of age, even if they continue to work, and additional rights can
be earned by working until 67 years of age. The scheme is a multi-company defined benefit scheme, and is financed
by premium payments determined as a percentage of salary. There is as yet no reliable measurement and allocation
of liabilities and assets between the companies that participate in the scheme. The new scheme is therefore treated
for accounting purposes as a defined contribution pension scheme. The premiums paid in 2012 were set at 1.75 %
of total salary payments for salary payments to the employer’s employees between the social security base amount
(G) and 7.1 G. The equivalent premium rate for 2013 will be 2.0%, and it is expected that the level of premiums will
increase in future years.
Employees in the group’s Swedish companies are principally members of the ITP pension scheme.
The ITP scheme is based on collective agreement between the Confederation of Swedish Enterprise and the Council
for Negotiation and Co-operation representing salaried employees within the private sector. ITP came into opera-
tion on 1 July 2007, and applies to employees born in 1979 or later. All new employees become members of the
scheme at 25 years of age. The ITP scheme is a defined contribution scheme, to which the employer contributes
4.5 % of salary up to 7.5 times the “basic income amount” and 30 % of salary over this amount. Employees born
before 1979 are members of the old scheme, which is a combination of a defined contribution scheme and a defined
benefit scheme (ITPK and ITP2 respectively). ITP2 is a multi-company scheme that provides a retirement pension
calculated as 10% of final salary for salary up to 7.5 times the “basic income amount”, 65 % of final salary for salary
between 7.5 times and 20 times the “basic income amount” and 32.5 % of final salary for salary between 20 times
and 30 times the “basic income amount”. Full pension entitlement is earned after 30 years of pensionable employ-
ment. There is no reliable measurement and allocation of the company’s share of the overall assets and liabilities
of the scheme. The scheme is therefore treated in the accounts as a defined contribution scheme. ITPK is a defined
contribution scheme with a contribution rate of 2 %with the possibility of additional contributions by agreement.
The members of executive management are members of a pension plan financed from operations. The operations
pension plan is not subject to the legislation on defined contribution pensions or the legislation on enterprise
pensions, and is not funded. The annual pension entitlement is calculated as 30 % of salaries exceeding 12 G for
the Chief Executive Officer and 25 % of salaries exceeding 12 G for other members of the executive management.
The annual return shall at a minimum equal 12 months NIBOR as at 31 December of the previous year. The pension
cost charged to the accounts in 2012 was NOK 3.3 million. The accumulated accrued entitlement, including invest-
ment return and employer’s social security contributions, totalled NOK 13.5 million at 31 December 2012.
Note 05