5.1 Employee benefit liabilities
5. Other information
This section provides other information and disclosures not included in other sections for example information about the employee benefits obligations. It also includes an overview of the balance-sheet related deferred tax assets and liabilities and finally significant events occuring after reporting date.
5.1 Employee benefit liabilities
Economic benefit/economic obligation and pension benefit expenses
The table shows the economic benefit and the economic obligation at the end of the year under review and for the previous year, as well as the development of pension benefit expenses.
The employee benefit plans with surplus in the amount of CHF 24 million (previous year: CHF 5 million) relate to the pension fund of GF Machining Solutions. The performance of the financial assets shows a positive development in the year under review. The employee benefit plans with a deficit in the amount of CHF 24 million (previous year: CHF 25 million) relate to the defined benefit plans in the UK and the USA. The amount of the deficit depends largely on the value of the securities and on the discount rate applied to determine the pension obligations. The entire economic obligation covering the outflow of funds anticipated in the medium term corresponds to the reported deficit and amounts to CHF 20 million (previous year: CHF 20 million). The economic obligation for employee benefit plans without own assets, i.e. unfunded plans, as recognized in the balance sheet, amounts to CHF 107 million (previous year: CHF 99 million) and relates mainly to employee benefit plans in Germany. The loans from pension fund institutions in the amount of CHF 28 million (previous year: CHF 29 million) are from pension fund institutions in Germany that have invested their funds in Corporate Companies.
The following table summarizes the pension benefit expenses in the year under review and for the previous year:
The change in the economic obligation from employee benefit plans and the employer contributions paid for the year under review, as recognized in the balance sheet, amount to CHF 24 million (previous year: CHF 27 million) and are included in the “Personnel expenses”.
The employee benefit plans of the Corporation comply with the legislation in force in each country. Employee benefit plans are mostly institutions and foundations that are financially independent of the Corporation. They are usually financed by both, employee and employer contributions.
The economic impact of the employee benefit plans is assessed each year. Surpluses or deficits are determined by means of the annual statements of each specific benefit plan, which are based either on Swiss GAAP FER 26 (Swiss benefit plans) or on the accepted methods in each foreign country (foreign plans). An economic benefit is capitalized if it is permitted and intended to use the surplus to reduce the employee contributions. If employer contribution reserves exist, they are also capitalized. An economic obligation is recognized as a liability if the conditions for an accrual are met. They are reported under “Employee benefit obligations”. Changes in the economic benefit or economic obligation, as well as the contributions incurred for the period, are recognized in “Personnel expenses” in the income statement.