Saab 2015 Annual Report Download - page 104

FINANCIAL INFORMATION – FINANCIAL STATEMENTS
Note 34, cont.
Sensitivity analysis (excluding special employer’s contribution)
Group
MSEK Change
Change in
obligation
Discount rate 0.25% -322
-0.25% 345
Inflation 0.25% 347
-0.25% -326
Salaries 0.25% 77
-0.25% -75
Life span +1 år 281
Return on assets under management
Group
MSEK 2015 2014
Actual return on assets under management 225 526
Financial income on assets under management -146 -202
Actuarial result from assets under management
during the year 79 324
Governance
The pension fund is governed by the Pension Board, which resumes 4-5 times per
year and has the following responsibilities:
• Appoint the members of the Investment Committee
• Appoint the Fund Manger
• Annually establish the Investment Policy
• Decide on strategic (long-term) and tactical (short-term) asset allocation and
allow deviations in accordance with the terms of the SAA and TAA mandate
• Annually approve the benchmark indices to track the fund’s performance
• Annually approve the stop loss limit
Investment strategy and risk management
The pension fund manages the allocation and investment of assets with an aim to
increase the consolidation level over time. Certain risks are accepted in order to
achieve the desired return. The investment horizon is long-term and the allocation
ensures that the investment portfolio is well diversified.
The Fund’s investments are subject to a number of restrictions and limitations,
the purpose of which is to limit investment losses. Group Treasury continuously
monitors the Fund’s management and reports its findings to the Chairman of the
Board and the Investment Committee.
Assets under management divided by asset class
Group
Per cent 2015
of which
listed on
an active
market 2014
of which
listed on
an active
market
Interest-bearing assets 40 100 48 100
Share-related assets 37 100 35 100
Hedge funds 13 - 14 -
Property 9 - 1 -
Liquid assets 1 - 2 -
Total assets 100 77 100 83
Assumptions for defined-benefit obligations
Group
Per cent 2015 2014 2013 2012 2011
Significant actuarial assumptions
as of closing day (expressed as
weighted averages)1)
Discount rate, 31 December 3.25 2.50 4.00 3.00 3.50
Future salary increase 2.75 2.50 3.00 3.00 3.00
Future increase in pensions 1.75 1.50 2.00 2.00 2.00
Employee turnover 3.00 3.00 3.00 3.00 3.00
1) Refers to Sweden since essentially all defined-benefit plans are in Sweden
The following assumptions serve as the basis of the valuation of Saab’s pension
liability:
Discount rate: The valuation is based on covered Swedish mortgage bonds
(AAA). The same discount rate has been used for all future payments. The rate is
based on the duration of all cash flows.
Long-term salary increase assumption: The long-term salary increase
assumption corresponds to a real salary increase of 1 per cent plus an inflation
assumption of 1.75 per cent, rendering a future salary increase of 2.75 per cent.
Long-term inflation assumption: The long-term inflation assumption is based
on market pricing of inflation on maturities corresponding to the pension liability’s
duration. For 2015, the assumption is 1.75 per cent.
Mortality: Mortality is according to DUS14, the latest large mortality study in
Sweden.
Employee turnover: The employee turnover is assumed to be 3 per cent per year.
ACCOUNTING PRINCIPLES PARENT COMPANY
The parent company’s accounting principles differ from IAS 19 in the following
ways:
-The calculation does not take into account future salary increases
-The discount rate is determined by PRI
-Changes in the discount rate and other actuarial assumptions are recognised
directly in the income statement and balance sheet
-Surplus in the pension plan cannot be recognised as an asset while the decifit
should either be expensed or recovered through contributions to the pension fund
Parent Company’s pension obligations
Funds allocated for pensions according to the balance sheet correspond to the net
present value of existing pension obligations less funds that are secured by Saab’s
pension fund.
MSEK 31-12-2015 31-12-2014
Pension obligations ITP 2 4,076 3,982
Less funds secured in pension fund -4,076 -3,982
Total ITP 2 and the book reserve method - -
Other pensions 74 65
Other provisions for pensions 63 75
Total 137 140
Of which credit guarantees in PRI Pensionsgaranti 52 63
MSEK 2015 2014
Amount related to pension obligations ITP 2 expected
to be settled within 12 months 172 165
NOTE 35 PROVISIONS
ACCOUNTING PRINCIPLES
A provision is recognised in the statement of financial position when the Group
has a legal or informal obligation owing to an event that has occurred and it is likely
that an outflow of economic resources will be required to settle the obligation and
a reliable estimate of the amount can be made. Where it is important when in time
payment will be made, provisions are estimated by discounting projected cash
flow at a pre-tax interest rate that reflects current market estimates of the time
value of money and, where appropriate, the risks associated with the liability.
Restructuring
A provision for restructuring is recognised when a detailed, formal restructuring
plan has been established and the restructuring has either begun or been
publicly announced. No provision is made for future operating losses.
A provision is recognised in connection with termination of personnel only if the
company is obligated to terminate an employment before the customary time,
e.g., when compensation is paid in connection with a voluntary termination offer.
In cases where the company terminates personnel, a detailed plan is drafted
contain-ing at the minimum the workplaces, positions and approximate number
of individu-als affected as well as compensation for each personnel category or
position and a schedule for the plan’s implementation.
100 – SAAB ANNUAL REPORT 2015