Volvo 2009 Annual Report Download - page 100

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Notes to consolidated financial statements
Net provision for
post-employment benefits Sweden
Pensions
United
States
Pensions France
Pensions
Great
Britain
Pensions
US
Other
benefits Other
plans Total
Funded status at December 31, 2008 (3,630) (2,976) (2,087) (43) (6,867) (3,463) (19,066)
Unrecognized actuarial (gains) and losses 3,476 4,021 207 604 382 630 9,320
Unrecognized past service costs –(1) 464 –(8) 27 482
Net provisions for post-employment benefits
at December 31, 2008 (154) 1,044 (1,416) 561 (6,493) (2,806) (9,264)
whereof reported as
Prepaid pensions and other assets 14 1,422 0561 320 124 2,441
Provisions for post-employment benefits (168) (378) (1,416) 0(6,813) (2,930) (11,705)
Funded status at December 31, 2009 (3,451) (3,492) (1,897) (46) (3,669) (2,905) (15,460)
Unrecognized actuarial (gains) and losses 3,030 4,373 232 635 3841501 9,155
Unrecognized past service costs –(81) 405 –(6) (15) 303
Net provisions for post-employment
benefits at December 31, 2009 (421) 800 (1,260) 589 (3,291) (2,419) (6,002)
whereof reported as
Prepaid pensions and other assets –1,254 –588 120 87 2,049
Provisions for post-employment benefits (421) (454) (1,260) 1 (3 , 411) (2,506) (8,051)
1 A decrease by 194 from reclassification to financial liability in Mack Trucks.
Plan assets by category 2008 % 2009 %
Shares and participation, Volvo 138 1195 1
Shares and participations, other 9,046 41 10,893 48
Bonds 10,564 48 10,167 45
Property 732 3319 1
Other 1,625 71,036 5
Total 22,105 100 22,610 100
Actual return on plan assets amounted to 2,821 (neg 4,550).
Actuarial gains and losses 2008 2009
Experience-based adjustments in obligations (871) (110)
Experience-based adjustments in plan assets (6,208) 1,463
Effects of changes in actuarial assumptions 69 (1,696)
Actuarial gains and (losses), net (7,010) (343)
Volvo’s pension foundation in Sweden was formed in 1996 to secure
obligations relating to retirement pensions for salaried employees in
Sweden in accordance with the ITP plan (a Swedish individual pension
plan). Plan assets amounting to 2,456 was contributed to the foundation
at its formation, corresponding to the value of the pension obligations
at that time. Since its formation, net contributions of 1,472 have been
made to the foundation. The plan assets in Volvo’s Swedish pension
foundation are invested in Swedish and foreign stocks and mutual
funds, and in interest-bearing securities, in accordance with a distri-
bution that is determined by the foundation’s Board of Directors. At
December 31, 2009, the fair value of the foundation’s plan assets
amounted to 6,408 (5,467), of which 46% (35) was invested in shares
or mutual funds. At the same date, retirement pension obligations
attributable to the ITP plan amounted to 9,465 (8,675).
Swedish companies can secure new pension obligations through
balance sheet provisions or pension fund contributions. Furthermore,
a credit insurance must be taken for the value of the obligations. In
addition to benefits relating to retirement pensions, the ITP plan also
includes, for example, a collective family pension, which Volvo finances
through insurance with the Alecta insurance company. According to
an interpretation from the Swedish Financial Reporting Board, this is
a multi-employer defined benefit plan. For fiscal year 2009, Volvo did
not have access to information from Alecta that would have enabled
this plan to be reported as a defined benefit plan. Accordingly, the
plan has been reported as a defined contribution plan. Alecta’s funding
ratio is 141% (112.0).
Volvo’s subsidiaries in the United States mainly secure their pension
obligations through transfer of funds to pension plans. At the end of
2009, the total value of pension obligations secured by pension plans
of this type amounted to 13,007 (13,322). At the same point in time,
the total value of the plan assets in these plans amounted to 9,866
(10,672), of which 59% (50) was invested in shares or mutual funds.
The regulations for securing pension obligations stipulate certain min-
imum levels concerning the ratio between the value of the plan assets
and the value of the obligations. As a consequence of the Master
Agreement between Mack Trucks and United Auto Workers (UAW) an
independent trust has been established that will completely eliminate
Mack’s commitments for providing healthcare to retired employees.
FINANCIAL INFORMATION 2009
96