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NOTE 15
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PENSION COSTS AND LIABILITIES | |
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FERD'S PENSION PLANS
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Ferd has established pension schemes in accordance with Norwegian legislation. The employees participate in a defined contriution plan for salaries below 12G.
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For salaries exceeding 12 G, Ferd has established a pension scheme implying that the employees earn a pension right each year. The scheme was closed for new hires when established. The right comprises a share of the salary in excess of 12 G together with a return component depending on the employee's chosen risk profile. The pension plan has many similarities with a contribution scheme, but as Ferd is not making current payments to a fund, but has elected to take the risk of return itself, the scheme shall be classified as a benefit scheme for accounting purposes. Ferd has recognised the obligation as a pension liabiity and is expensing the current deposits and the current return as incurred.
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In addition, Group management has an early retirement pension scheme giving them the opportunity to retire at 65 years. This is also a benefit scheme.
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Financial assumptions at 31 December
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2016
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2015
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Discount interest rate
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2.00%
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1.90%
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Expected wage growth
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2.50%
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2.50%
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Future expected pension regulation
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1.75%
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1.75%
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Expected regulation of base amount (G)
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2.25%
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2.25%
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DEFINED BENEFIT PLANS
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Specification of the recognised liability
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NOK 1 000
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2016
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2015
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Present value of unfunded pension liabilities
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31 227
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30 007
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Fair value of pension funds
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-
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-
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Total defined benefit obligation recognised in the balance sheet at 31 Dec.
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31 227
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30 007
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Movement in liabilities for defined benefit pensions plans
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NOK 1 000
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2016
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2015
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Liabilities for defined benefit pension plans at 1 Jan.
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30 007
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24 659
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Present value of current year's pension earnings
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2 087
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3 053
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Interest expense on pension liabilities
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1 261
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361
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Estimate deviation on pension liabilities
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- 47
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1 934
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Benefits paid
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-2 237
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-
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Liabilities for defined benefit pension plans at 31 Dec.
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31 227
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30 007
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Estimate deviation recognised in total comprehensive income
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NOK 1 000
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2016
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2015
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Estimate deviation on the pension obligation (benefit schemes) of the year
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47
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-1 934
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Net estimate deviation for benefit schemes recognised in comprehensive income
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47
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-1 934
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Pension costs recognised in the income statement
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NOK 1 000
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2016
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2015
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Present value of this year's pension earnings
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2 244
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3 053
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Pension costs on contribution schemes
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4 193
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4 094
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Total pension costs recognised in the income statement as salary expenses
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6 437
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7 147
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Interest expense on the pension liability
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1 261
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361
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Total pension costs recognised in the income statement as interest expenses
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1 261
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361
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