5.1 Employee benefit liabilities

Economic benefit/economic obligation and pension benefit expenses

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2020

2019

 

 

 

2020

2019

CHF million

Surplus/ deficit according to FER 26

Economic part of the Corporation

Economic part of the Corporation

Translation differences

Change to prior-year period or recognized in the current result of the period, respectively

Contri- butions concerning the business period

Pension benefit expenses within personnel expenses

Pension benefit expenses within personnel expenses

 

 

 

 

 

 

 

 

 

Patronage funds

28

 

 

 

 

 

 

1

Employee benefit plans w/o surplus/deficit

 

 

 

 

 

5

5

23

Employee benefit plans with surplus

24

 

 

 

 

22

22

3

Employee benefit plans with deficit

–20

–16

–16

–1

1

3

4

2

Employee benefit plans without own assets

 

–36

–34

 

2

1

3

3

Loans from pension fund institutions

 

–3

–1

 

 

 

 

 

Total

32

–55

–51

–1

3

31

34

32

The GF Corporation maintains pension plans in various countries. The accounting for Swiss pension plans is based on the financial statements of the pension plan according to Swiss GAAP FER 26. Plans in other locations are accounted for according to their local regulations. The employee benefit plan in the US was closed as planned in the second half of 2020. Most of the employee pension plans have their own assets in addition to the respective pension obligations.

The table shows the economic benefit and the economic obligation as of the end of the year under review and for the previous year, as well as the changes in pension benefit expenses.

The economic part of the Corporation in the patronage funds amounted to CHF 0 million (previous year: CHF 0 million). 

One pension plan has a surplus. The Georg Fischer Pension Fund is overfunded by CHF 24 million (previous year: CHF 0 million). This is mainly due to the good performance of the financial investments.

The pension plan underfunded in the amount of CHF 20 million (previous year: CHF 21 million) is based on the defined benefit plan in the UK. The amount of the underfunding depends significantly on the value of the securities and on the discount rate and the expected mortality rate used in the calculation of the pension liabilities. The total economic obligation, which represents the expected cash outflow in the medium term, amounts to CHF 16 million (previous year: CHF 16 million). The data of the previous year includes the employee benefit plan in the US which was closed in the meantime.

The recognized economic obligation from the pension plans with no assets of their own, i.e. unfunded plans, amounted to CHF 36 million (previous year: CHF 34 million) and concerns primarily the employee pension plans in Germany and Sweden. The CHF 2 million increase in the economic obligation is included in the pension fund expenses for the period.

Loans from pension funds in the amount of CHF 3 million (previous year: CHF 1 million) are current account balances of employee benefit plans and patronage foundations at Georg Fischer AG. 

The following table summarizes the pension benefit expenses in the year under review and for the previous year:

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CHF million

2020

2019

 

 

 

Contributions to employee benefit plans from Corporate Companies

31

28

Contributions to employee benefit plans from employer contribution reserves

 

 

Total contributions

31

28

+/- Change in ECR from asset developments, value adjustments, etc.

 

 

Contributions and change in employer contribution reserves (ECR)

31

28

 

 

 

Decrease/increase in economic benefit of the Corporation from surplus

 

 

Increase/decrease in economic obligation of the Corporation from deficit

1

1

Increase/decrease in economic obligation of the Corporation employee benefit plans without own assets

2

3

Total change in economic effect of surplus/deficit

3

4

Pension benefit expenses within personnel expenses in the period under review

34

32

Changes in the recognized economic obligations from pension plans and the employer-paid contributions for the year under review amounted to CHF 34 million (previous year: CHF 32 million) and are included in “Personnel expenses”.

Accounting principles

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 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 employer contributions. Any employer contribution reserves are also capitalized. An economic obligation is recognized as a liability if the conditions for a provision 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.

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