Nrs uses the swap rates from the interbank market to

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Unformatted text preview: unrecognised net actuarial gains (losses) 1) Total provision for pensions as of 31 December 3 983 (143) - (2) 326 (80) (1) 4 083 3 112 (1 179) 1 933 4 173 171 (7) (604) 346 (96) (1) 3 983 2 056 (138) 1 918 Total provision for pensions as of 1 January Acquisitions and sale Net periodic benefit costs Pension contribution benefits paid paid-up policies social security tax on pension contribution Translation difference Total provision for pensions as of 31 December 1 918 - 453 (326) (65) (41) (6) 1 933 2 089 (221) 468 (346) (57) (34) 20 1 918 1) benefit obligation and unrecognised net actuarial gains (losses) includes social security tax. Amounts for the current and previous four periods are as follows: NOK in millions benefit obligations as of 31 december Fair value of plan assets as of 31 december Funded status Experience adjustments on benefit obligations in % difference between expected and actual return on plan asset in % 2011 2010 7 195 4 083 3 112 9.6 (9.0) 6 039 3 983 2 056 8.2 (2.1) 2009 2008 2007 7 843 4 165 3 677 0.5 (15.6) 5 783 4 173 1 610 13.2 12.7 6 283 3 868 2 415 (1.3) (2.9) Experience adjustments on benefit obligations are the effects of differences between previous actuarial assumptions and what has actually occurred. Assumptions used to determine benefit obligations for Norwegian companies as of 31 december 2011 2010 3.0 3.3 3.3 5.0 7.5 2.8 4.2 3.8 3.8 5.0 7.6 3.3 2011 2010 4.2 5.5 3.8 3.8 5.0 7.6 3.3 5.0 6.3 4.5 4.5 8.0 8.2 4.0 discount rate in % Future salary increase in % Future increase in the social security base amount in % Future turnover in % Expected average remaining service period in years Future pension increases in % Assumptions used to determine net periodic benefit costs for Norwegian companies for year ended 31 december discount rate in % Expected return on plan assets in % Future salary increase in % Future increase in the social security base amount in % Future turnover in % Expected average remaining service period in years Future pension increases in % /page 60/ telenor annual report 2011 notes to the financial statements / telenor group The assumptions are set based on an internally developed model and are evaluated against guidelines published by The Norwegian Standard Accounting Board (NRS). The discount rate for the defined benefit plan in Norway was estimated based on the interest-rate on Norwegian government bonds. Average time before the payments of earned benefits was calculated to be 22 years, and the discount rate was projected to a 22-year rate based on reference to German non-current interest rates, as the longest duration in Norway is 10 years. The assumption for salary increase, increase in pension payments and G-regulation are tested against historical observations and the relationship between different assumptions. The discount rate for the benefit obligation as of 31 December 2011 was set to 3.0%, compared to 2.6% recommended by NRS. The difference of 0.4% is due to different methods, but the method used by Telenor is also described in the NRS guidelines. NRS uses the swap rates from the interbank market to calculate average zero coupons. NRS has not calculated a recommended rate based on a duration calculation according to bonds in the German zone. The expected return on plan assets is based on the asset allocation in the Pension Fund, see also table below. Future salary increase is set at 3.3%, the same level of salary increase (excluding career adjustment) as NRS guidelines. Future increase in the social security base amount is set at 3.3%, also at the same as the NRS guidelines. Future pension increases are set 0.5 percentage points below the social security base amount based on historical observations in the Group. Components of net periodic benefit cost NOK in millions 2011 2010 (394) (256) 226 (30) 13 (12) (453) (411) (865) 18 (883) service cost interest cost Expected return on plan assets Past service cost losses on curtailments and settlements Amortisation of actuarial gains and losses Net periodic benefit costs Contribution plan costs Total pension costs charged to the income statement for the year Where of reported as other expense (note 10) Where of reported as pension cost (note 8) (378) (245) 227 (34) (45) 7 (468) (413) (880) (46) (834) The table below shows an estimate of the potential effects of changes in the key assumptions for the defined benefit plans in Norway. The following estimates are based on facts and circumstances as of 31 December 2011. Actual results may deviate materially from these estimates. Annual Future salary social security adjustments increase NOK in millions discount rate Change in % is percentage points 1% benefit obligations 1 215 Expense due to amortisation of actuarial losses 158 Net periodic benefit cost including effect due to amortisation of actuarial losses (as shown above) 265 +1% 1% base amount to pensions +1% 1% 1% +1% Turnover +1% 4% +4% (949) (586) 629 180 (227) (617) 875 241 (198) (123) (76) 82 23 (29) (80) 114 31 (26) (206) (134) 143 38 (50) (127) 179 58 (47) Telenor Pension Fund’s we...
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This document was uploaded on 03/21/2014.

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