Note 33 - Pension Provisions

Compensation for pensions and other compensation after employment is mainly paid through contribution-based plans in which regular payments are made to authorities and insurance companies. These independent bodies thereby assume the obligations vis-à-vis the employees. Within the Group there are also a number of benefit-based plans under which the employees are guaranteed a pension corresponding to a percentage of salary.

Provisions for pensions and similar obligations

Defined benefit plans

Within the Group, there are a number of defined benefit plans where, after completion of employment, the employees are entitled to compensation based on final salary and period in employment. The largest plans relate to Sweden (representing one-half of the total pension plan), Germany, Belgium, the Netherlands and the UK.

Pension insurance with Alecta

Obligations regarding retirement pensions and family pensions for white collar staff in Sweden are secured through insurance with the independent insurance company, Alecta. According to a statement issued by the Emergency Issues Task Force of the Swedish Financial Reporting Board, URF 3, this is a defined benefit plan which covers several employers. Duni does not have access to such information as makes it possible to report this plan as a defined benefit plan. The pension plan according to ITP, which is secured through insurance with Alecta, is thus reported as a defined contribution plan. The year's charges for pension policies taken out with Alecta amount to SEK 3 m (2010: SEK 3 m). Alecta's surplus may be divided among the policy holders and/or the insured. As per December 31, 2011, Alecta's surplus in the form of the collective funding level amounted to 113% (2010: 146%). The collective funding level constitutes the market value of Alecta's assets as a percentage of the insurance obligations, calculated in accordance with Alecta's actuarial calculation assumptions, which do not correspond to IAS 19.

The amounts reported in the consolidated balance sheet consist of:

Total pension expenses reported in the consolidated income statement are as follows:

The expenses regarding defined benefit plans are allocated in the consolidated income statement on the following items:

The change in the defined benefit obligation during the year is as follows:

The change in fair value of plan assets during the year is as follows:

The plan assets are located primarily in Holland and UK. Funding of defined benefit plans in Duni consists primarily of insurance contracts which provide a guaranteed annual return with the possibility of a bonus decided on annually by the insurance company. Most of the insurance contracts are invested in equity instruments. The assumed return on plan assets is stated as the guaranteed return plus the anticipated bonus.

Contributions to defined benefit plans are expected to amount to SEK 8.8 m in 2012.

During the year, PRI Pensionstjänst has changed its life expectancy assumptions when calculating the PRI pension liability. This has affected the Parent Company's pension liability and pension expenses for the year in the amount of SEK 7 m. This has no effect in the Group since its life expectancy assumptions in conjunction with actuarial calculations pursuant to IAS 19 have been used since 2006.

The change in the defined benefit during the year is as follows:

The liability in the Parent Company relates to pension obligations at PRI.