Volvo 2010 Annual Report Download - page 100

Download and view the complete annual report

Please find page 100 of the 2010 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 154

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154

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, 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)
of which 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)
Funded status at December 31, 2010 (2,066) (3,463) (1,605) 167 (3,417) (2,783) (13,167)
Unrecognized actuarial (gains) and losses 1,475 4,054 113 388 322 643 6,995
Unrecognized past service costs – (65) 380 – (5) – 310
Net provisions for post-employment
benefits at December 31, 2010 (591) 526 (1,112) 555 (3,100) (2,140) (5,862)
of which reported as
Prepaid pensions and other assets – 900 – 555 110 83 1,648
Provisions for post-employment benefits (591) (374) (1,112) – (3,210) (2,223) (7,510)
1 A decrease by 194 from reclassification to financial liability in Mack Trucks.
Plan assets by category 2009 % 2010 %
Shares and participation, Volvo 195 1 403 2
Shares and participations, other 10,893 48 11,494 50
Bonds and interest-bearing securities. 10,167 45 9,100 40
Property 319 1 440 2
Other 1,036 5 1,517 6
Total 22,610 100 22,954 100
Actual return on plan assets amounted to 2,259 (2,821).
Actuarial gains and losses 2009 2010
Experience-based adjustments in obligations (110) 293
Experience-based adjustments in plan assets 1,463 861
Effects of changes in actuarial assumptions (1,696) 235
Actuarial gains and (losses), net (343) 1,389
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 were contributed to the foun-
dation at its formation, corresponding to the value of the pension obli-
gations 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
distribution that is determined by the foundation’s Board of Directors.
At December 31, 2010, the fair value of the foundation's plan assets
amounted to 7,059 (6,408), of which 57% (46) was invested in shares
or mutual funds. At the same date, retirement pension obligations
attributable to the ITP plan amounted to 8,794 (9,465).
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 fund-
ing ratio is 143% (141).
Volvo’s subsidiaries in the United States mainly secure their pen-
sion obligations through transfer of funds to pension plans. At the end
of 2010, the total value of pension obligations secured by pension
plans of this type amounted to 11,378 (12,923). At the same point in
time, the total value of the plan assets in these plans amounted to
9,535 (9,866), of which 59% (59) was invested in shares or mutual
funds. The regulations for securing pension obligations stipulate cer-
tain minimum levels concerning the ratio between the value of the
plan assets and the value of the obligations. As a consequence of the
Master Agreement 2009 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
FINANCIAL INFORMATION 2010
96