Note 20 - Provisions for pensions and similar obligations
The Group has entered into pension agreements with a significant number of its employees. Most of the pension plans are defined contribution plans, and only a small number are defined benefit plans. A health insurance plan has also been established in the USA.Some of the pension plans are funded by payments from Group companies. However, some plans are not funded, and a liability has been recognized in the balance sheet for these plans.
As well as pension agreements, a few countries also have plans covering other long-term employee benefits which meet local requirements for insuring employees in the event of termination, etc.
| 2007 | 2006 | |||
| DKK million | DKK million | |||
| Amounts recognized in the income statement re defined benefit pension plans: | ||||
| Current service costs | 6 | 7 | ||
| Interest costs | 2 | 2 | ||
| Expected return on plan assets | (3) | (3) | ||
| Service costs relating to changes to plans | 1 | (3) | ||
| Total amount re. defined benefit plans recognized in the income statement | 6 | 3 | ||
| The actual return on plan assets was a positive return of DKK 1 million (2006: a positive return of DKK 2 million). | ||||
| 2007 | 2006 | |||
| DKK million | DKK million | |||
| Amounts recognized in the balance sheet re. defined benefit pension plans: | ||||
| Present value of fully/partly funded obligations | 63 | 76 | ||
| Fair value of plan assets | (75) | (84) | ||
| (12) | (8) | |||
| Present value of unfunded obligations | 18 | 12 | ||
| Unrecognized actuarial gains/(losses) | 6 | 8 | ||
| Unrecognized part of benefit assets | 4 | 3 | ||
| Liability recognized in the balance sheet | 16 | 15 | ||
| 2007 | 2006 | |||
| DKK million | DKK million | |||
| Movement in the net liability: | ||||
| Opening net liability | 15 | 17 | ||
| Currency translation | (1) | (1) | ||
| Total amount expensed in the income statement | 6 | 3 | ||
| Contributions paid | (6) | (6) | ||
| Other changes | 2 | 2 | ||
| Closing net liability | 16 | 15 | ||
| The actuarial valuations of the most significant defined benefit plans have been based on the following assumptions: | ||||
| 2007 | 2006 | |||
| Discount rates | 3.3 % | 2.9 % | ||
| Expected rates of return on plan assets | 4.3 % | 3.5 % | ||
| Future salary increases | 1.3 % | 1.3 % | ||
| Annual increase in healthcare costs | 7.3 % | 7.6 % | ||
