Hexagon Annual Report 2019

(NOK 1 000) 2019 2018 Plan assets 1 January 17 624 18 186 Return on plan assets 401 306 Actuarial gains/losses (-) -197 -81 Administrative costs -67 -176 Pension premiums 1 358 1 718 Paid pensions -335 -186 Translation differences 0 37 Effect change of plans 0 -2 180 Additions from purchase of companies 816 Plan assets 31 December 19 602 17 624 CHANGE IN FAIR VALUE OF PLAN ASSETS DURING THE YEAR 2019 2018 (NOK 1 000) ALLOCATION AMOUNT ALLOCATION AMOUNT Shares 13 % 2 533 12 % 2 133 Bonds/certificates 76 % 14 809 78 % 13 765 Property 11% 2 143 9 % 1 604 Other 0 % 0 1 % 123 Total 100 % 19 486 100 % 17 624 AVERAGE DISTRIBUTION OF PLAN ASSETS BY INVESTMENT CATEGORY AS OF 31 DECEMBER The actual return on plan assets in 2019 was NOK 225 thousand (225 thousand in 2018), allowing for previous years’ actuarial gains/losses. 2019 2018 (NOK 1 000) NORWAY GERMANY NORWAY GERMANY Discount rate 2.31 % 1.46 % 2.60 % 2.19 % Return on plan assets 2.31 % 1.46 % 2.60 % 2.19 % Salary increases 2.25 % 2.00 % 2.75 % 1.50 % Pension increases 0.50 % 1.50 % 0.80 % 0.00 % Adjustment of national insurance base rate 2.00 % 1.50 % 2.50 % 1.50 % Mortality table K2013 BE RT Heubech 2018G K2013 BE RT Heubech 2005G CALCULATION OF PENSION EXPENSES AND NET PENSION LIABILITIES IS BASED ON THE FOLLOWING ASSUMPTIONS The Group has used the Norwegian covered bonds (OMF) as basis for the discount rate as of 31 December for both 2019 and 2018 for the Norwegian plans. 148 (150) of the Norwegian employees is a member of a new "agreement-based early retirement plan" (new AFP). The AFP plan is a lifelong supplement to the regular pension. Employees can take the new AFP scheme from the age of 62 or remain in employment and earn further benefits until the standard retirement age of 67. The AFP pension scheme is a defined benefit multi-employer pension plan, funded through premiums that are defined as a percentage of salary. The scheme's retirement benefit obligation and plan assets cannot be reliably measured and allocated at present. For accounting purposes, the scheme is treated as a defined contribution plan, with premium payments expensed as incurred, and no obligation recognized in the balance sheet. Premiums is 2.5% (2.5% in 2018) for salaries in the range 1.0 - 7.1 times the national insurance base rate (G) and is expected to increase in the coming years. Total contribution for the arrangement were NOK 1 994 thousand in 2019 and NOK 1 939 thousand in 2018. Expected premium for 2020 is NOK 2 039 thousand. MULTI-EMPLOYER PENSION PLAN IN NORWAY 44 130 2019 AT A GLANCE FROM THE BOARD ROOM FINANCIAL STATEMENTS