Nokia 2008 Annual Report Download - page 171

4. Personnel expenses
2008 2007 2006
EURm EURm EURm
Wages and salaries ......................................... 5 615 4 664 3 457
Sharebased compensation expense, total ....................... 67 236 192
Pension expenses, net....................................... 478 420 310
Other social expenses ....................................... 754 618 439
Personnel expenses as per profit and loss account ................ 6 914 5 938 4 398
Sharebased compensation expense includes pension and other social costs of EUR 7 million in 2008
(EUR 8 million in 2007 and EUR 4 million in 2006) based upon the related employee benefit charge
recognized during the year. In 2006, a benefit was recognized due to a change in the treatment of
pension and other social costs.
Pension expenses, comprised of multiemployer, insured and defined contribution plans were
EUR 394 million in 2008 (EUR 289 million in 2007 and EUR 198 million in 2006). Expenses related to
defined benefit plans comprise the remainder.
2008 2007 2006
Average personnel
Devices & Services ........................................ 57 443 49 887 44 716
NAVTEQ................................................. 3 969 ——
Nokia Siemens Networks ................................... 59 965 50 336 20 277
Corporate Common Functions ............................... 346 311 331
Nokia Group ............................................. 121 723 100 534 65 324
5. Pensions
The Finnish plan comprises of the Finnish state Employees’ Pension Act (“TyEL”) system with benefits
directly linked to employee earnings. These benefits are financed in two distinct portions. The
majority of the benefits are financed by contributions to a central pool with the majority of the
contributions being used to pay current benefits. The rest is comprised of reserved benefits, which
prior to March 1, 2008 were prefunded through a trusteeadministered Nokia Pension Foundation
and accounted for as a defined benefit plan.
As of March 1, 2008 the Finnish statutory pension liability and plan related assets of Nokia and Nokia
Siemens Networks were transferred to two pension insurance companies. The transfer did not affect
the number of employees covered by the plan nor did it affect the current employees’ entitlement to
pension benefits.
At the transfer date, the Group has not retained any direct or indirect obligation to pay employee
benefits relating to employee service in current, prior or future periods. Thus, the Group has treated
the transfer of the Finnish statutory pension liability and plan assets as a settlement of the Group’s
TyEL defined benefit plan. From the date of transfer onwards, the Group has accounted for the TYEL
plans as a defined contribution plan. The transfer resulted in a EUR 152 million loss consisting of a
EUR 217 million loss impacting Corporate Common Functions and a EUR 65 million gain impacting
Nokia Siemens Networks operating profit. These are included in other operating income and expense,
see Note 6.
Foreign plans include both defined contribution and defined benefit plans. After the settlement of
TyEL liabilities, the Group’s most significant pension plans are in Germany and in the UK. 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
F27
Notes to the Consolidated Financial Statements (Continued)