Benefit expenses

One-time effects influencing pension plans and other long-term benefits

In spring 2012, LLB AG decided to change its pension plan model, which pursuant to IAS 19 led to plan changes and plan reductions. For the business year 2012, the plan changes amounted to CHF 19.8 million and the plan reductions amounted to CHF 3.7 million. This actuarial one-time effect was recognised as a reduction in personnel expenses in the 2012 business year in conformance with IAS 19. In 2012, in connection with the change in pension plan model, the Personnel Pension Fund Foundation of LLB AG was reorganised. 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.

On 1 January 2014, the LLB Group introduced a new compensation model. This implements a higher variable salary component and makes the variable salary component subject to pension plan contributions. The Foundation Board of the Personnel Pension Fund Foundation of LLB AG had approved the new compensation model in April 2013. The new compensation model led to an increase in the benefit obligation and to a one-time charge in personnel expenses of CHF 2.9 million, as well as an additional annual expense of CHF 1.4 million. Both effects were recognised fully in the income statement per 31 December 2013.

The closure of LLB (Switzerland) Ltd., as announced in connection with the Focus2015 strategy, led to a reduction in the benefit obligation and to a one-time reduction in personnel expenses of CHF 3.9 million, which was recognised fully in the income statement per 31 December 2013.

The following amounts are reported in the income statement and in equity as benefit plan expenses:

Benefit expenses

 

Pensions plans

Other long-term benefits

in CHF thousands

2013

2012

2013

2012

Defined benefit costs

 

 

 

 

Service cost

 

 

 

 

Current service cost

–18'887

–18'215

–501

–831

Past service cost including effects of curtailment

2'673

21'241

13

3'679

Total service cost

–16'214

3'026

–488

2'848

Net interest

 

 

 

 

Interest cost on defined benefit obligation

–8'723

–11'291

–67

–164

Interst income on plan assets

7'446

9'022

0

0

Total net interest

–1'277

–2'269

–67

–164

Administration expense

–731

–713

0

0

Net actuarial (losses) / gains recognised

0

0

79

–217

Others

0

0

36

0

Total defined benefit cost

–18'222

44

–440

2'467

thereof personal expense

–18'222

44

–440

2'467

thereof financial expense

0

0

0

0

Contributions to defined contribution plans

–206

–215

0

0

 

 

 

 

 

Remeasurement of the defined benefit liability

 

 

 

 

Actuarial (gains) / losses

 

 

 

 

Arising from changes in demographic assumptions

0

0

 

 

Arising from changes in economic assumptions

15'898

–26'155

 

 

Arising from experience

12'309

17'155

 

 

Return on plan assets (excl. amounts incl. in interest income)

12'697

16'661

 

 

Others

–471

0

 

 

Total defined benefit cost recognised in other comprehensive income

40'433

7'661

 

 

 

 

 

 

 

Total benefit cost

22'211

7'705

–440

2'467

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