Nokia 2007 Annual Report Download - page 171
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5. Pensions (Continued)
In connection with the formation of Nokia Siemens Networks, the Group assumed multiple pension
plans reflected as acquisitions in the following tables. The majority of active employees in Germany
participate in a pension scheme which is designed according to the Beitragsorientierte Siemens
Altersversorgung (“BSAV”). The funding vehicle for the BSAV is the NSN Pension Trust. In Germany,
individual benefits are generally dependent on eligible compensation levels, ranking within the Group
and years of service.
The pension acts applying to wage and salary earners in private sectors in Finland, including the
former TEL Act, were combined on January 1, 2007 into one earningsrelated pensions act, the
Employee Pensions Act (TyEL). The change had no impact to the Group’s net pension asset in Finland.
Effective on January 1, 2005, the former Finnish Employees’ Pension Act (“TEL”) system was reformed.
The most significant change that has an impact on the Group’s future financial statements is that
pensions accumulated after 2005 are calculated on the earnings during the entire working career, not
only based on the last few years of employment as provided by the old rules.
As a result of the 2005 changes in the TEL system, which increased the Group’s obligation in respect
of exemployees, and reduced the obligation in respect of recent recruits, a change in the liability has
been recognised to cover future disability pensions. In 2005, to compensate the Group for the
additional liability in respect of exemployees, assets of EUR 24 million were transferred from the
pooled part of the pension system to cover future disability pensions inside Nokia Pension
Foundation. As this transfer of assets is effectively a reduction of the obligation to the pooled
premium, it has been accounted for as a credit to the profit and loss account during 2005.
The following table sets forth the changes in the benefit obligation and fair value of plan assets
F28
Notes to the Consolidated Financial Statements (Continued)