Saab 2010 Annual Report Download - page 108

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Changes in net obligation for defined-benefit plans reported
in the statement of financial position
Group
MSEK 2010 2009
Net obligation for defined-benefit plans, 1 January -475 -424
Compensation paid -189 -159
Deposits to pension fund and other funding -170 -190
Cost reported in income statement 339 291
Settlement/Translation difference 3 7
Withdrawals from pension fund 23 -
Net obligation for defined-benefit plans, 31 December -469 -475
Change in pension obligation
Group
MSEK 2010 2009
Opening fair value, 1 January 5,577 5,004
Benefits vested during the year 170 155
Interest expense 226 213
Pension disbursements -189 -159
Settlement -14 -18
Actuarial gain/loss -523 395
Translation differences -14 -13
Closing fair value, 31 December 5,233 5,577
Change in assets under management
Group
MSEK 2010 2009
Opening fair value, 1 January 3,907 3,356
Assumed return 201 173
Withdrawals -23 -4
Settlement -14 -18
Contributions 170 190
Actuarial gain/loss 68 219
Translation differences -11 -9
Closing fair value, 31 December 4,298 3,907
Cost reported in income statement
Group
MSEK 2010 2009
Costs for employment during current year 170 155
Interest expense for obligation 226 213
Assumed return on assets under management -201 -173
Amortised actuarial losses 144 96
Cost of defined-benefit plans in income statement 339 291
Cost of defined-contribution plans 490 453
Payroll tax 185 169
Total cost of post-employment compensation 1,014 913
The cost is reported on the following lines in the income statement:
Group
MSEK 2010 2009
Cost of goods sold 685 641
Marketing expenses 59 45
Administrative expenses 56 48
Research and development costs 45 43
Financial expenses 169 136
Total cost of post-employment compensation 1,014 913
Interest expense and amortisation of actuarial losses less the assumed return
on assets under management is classied as nancial expense. Other pension
costs are divided by function in the income statement in relation to how
payroll expenses are charged to the various functions.
Return on assets under management
Group
MSEK 2010 2009
Actual return on assets under management 269 392
Assumed return on assets under management -201 -173
Actuarial result from assets under management
during the year 68 219
Assumptions for defined-benefit obligations
Group
Per cent 2010 2009 2008 2007 2006
Significant actuarial assumptions
as of closing day (expressed as
weighted averages)
Discount rate, 31 December 4.80 4.00 4.25 4.50 4.00
Assumed return on assets under
management, 31 December 6.00 5.00 5.00 5.00 5.00
Future salary increase 3.00 3.00 3.00 3.00 3.00
Future increase in pensions 2.00 2.00 2.00 2.00 2.00
Employee turnover 3.00 5.00 5.00 5.00 5.00
Anticipated remaining years in service 13.0 11.2 11.2 11.3 11.3
e following assumptions serve as the basis of the valuation of Saab’s
pension liability:
Discount rate: e valuation is based on covered Swedish mortgage bonds
(). Each assumed cash ow is discounted using an interest rate for the
corresponding maturity.
Assumed return on investment assets: Of the assets managed by the Saab Pen-
sion Fund,  per cent is invested in interest-bearing bonds and  per cent in
equities and hedge funds. e risk premium above current interest rate levels,
which has historical support and is used by many companies for shares, is
approximately - per cent above interest rates. For bonds, the interest rate
used is the same as the discount rate less a risk premium for mortgage bonds.
e assumed rate of return is  per cent () on the interest-bearing bonds and
 per cent () on equities and hedge funds. Saab’s pension fund does not own
any Saab shares.
Long-term salary increase assumption: Assumed to be as high as the increase
in the basic income amount. is means that Saab expects the same salary
increases as the national average.
Long-term increase in basic income: Data from Statistics Sweden on current
wage increases in the private sector provide an historical average during the
period – of approximately  per cent above ination.
Long-term rate of inflation: Based on the Riksbank’s ination target of  per
cent, which mirrors the market’s implicit expectations as measured by the
dierence between nominal and real bonds. It should be stressed that the
sensitivity of the valuation to ination assumptions is limited, since the dis-
count rate is based on the real interest rate curve.
NOTE 37, CONT.
FINANCIAL INFORMATION > NOTES
SAAB ANNUAL REPORT 2010 105