Nokia 2007 Annual Report Download - page 173
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5. Pensions (Continued)
Movements in prepaid pension cost recognized in the balance sheet are as follows:
2007 2006
EURm EURm
Prepaid pension cost at beginning of year . .................................... 108 127
Net income (expense) recognized in the profit and loss account ................... (131) (112)
Contributions paid ........................................................ 163 91
Acquisitions ............................................................. (175) —
Foreign currency exchange rate change ....................................... (1) 2
Prepaid (accrued) pension cost at end of year
(1)
................................ (36) 108
(1)
included within prepaid expenses and accrued income/accrued expenses.
The prepaid pension cost above is made up of a prepayment of EUR 218 million (EUR 206 million in
2006) and an accrual of EUR 254 million (EUR 98 million in 2006).
2007 2006 2005 2004 2003
EURm EURm EURm EURm EURm
Present value of defined benefit obligation ........... (2 266) (1 577) (1 385) (1 125) (1 009)
Plan assets at fair value........................... 2 174 1 409 1 276 1 071 887
Deficit ......................................... (92) (168) (109) (54) (122)
Experience adjustments arising on plan obligations amount to a loss of EUR 31 million in 2007
(EUR 25 million in 2006). Experience adjustments arising on plan assets amount to a loss of
EUR 3 million in 2007 (EUR 11 million in 2006).
The principal actuarial weighted average assumptions used were as follows:
Domestic Foreign Domestic Foreign
2007 2006
%%%%
Discount rate for determining present values ............... 5.50 5.40 4.60 4.78
Expected longterm rate of return on plan assets ............ 5.30 5.10 4.60 5.50
Annual rate of increase in future compensation levels ........ 3.00 3.30 3.50 3.59
Pension increases ..................................... 2.70 2.30 2.00 2.69
The expected longterm rate of return on plan assets is based on the expected return multiplied with
the respective percentage weight of the marketrelated value of plan assets. The expected return is
defined on a uniform basis, reflecting longterm historical returns, current market conditions and
strategic asset allocation.
F30
Notes to the Consolidated Financial Statements (Continued)