Notes
Note 15 – Pension liabilities
Norsk Tipping AS has both funded and unfunded pension schemes. The funded pension plans are administered by SPK, see the detailed description of the arrangement below. The unfunded pension plans involve retirement pension agreements with current and former holders of executive positions with salaries above 12G, as well as two other pension agreements for former senior employees.
The company has also on occasion entered into supplementary agreements concerning pensions funded through operations with some employees who left following organisational changes.
Norwegian Public Service Pension Fund (SPK)
Description of the arrangement:
Norsk Tipping AS has a group pension scheme for its employees in the Norwegian Public Service Pension Fund (SPK). The pension scheme provides benefits in line with the Norwegian Public Service Pension Fund Act. The benefits cover retirement, disability, spouse, and child pensions. In addition, the calculation applies to benefits from the age of 62 under the early retirement arrangement (AFP) for public sector employees. The pension benefits are coordinated with the national insurance scheme’s benefits. The company’s premium contributions are expensed under payroll and personnel expenses as they are incurred.
Premiums are set and pension liabilities calculated based on actuarial principles as part of the SPK arrangement. The arrangement is not fund based, rather it is based on the simulated administration of pension assets (‘notional assets’) as if the 65 per cent of the assets were invested in government bonds and 35 per cent on returns corresponding to the Government Pension Fund Global. Pension payments are guaranteed by the state (section 1 of the Norwegian Public Service Pension Fund Act). The pension scheme cannot be moved in the same way as a private pension scheme and this calculation assumes that the arrangement will be continued by SPK. The simulation is based on the bonds being held until maturity. The pension assets are valued at their book value.
Funded pension plans
Pension expenses
| Beløp i mill. kr. | 2020 | 2019 |
|---|---|---|
| Present value of year’s pensionable earnings | 47 | 46 |
| Interest expense from pension liabilities | 16 | 21 |
| Return on pension assets | -23 | -22 |
| Employees’ pension contributions | -6 | -6 |
| Administrative expenses | 1 | 1 |
| Net pension expenses before amortisation | 35 | 39 |
| Recognised effect of estimate deviations | 13 | 12 |
| Accrued employer’s national insurance contributions1) | 8 | 8 |
| Net pension expenses funded pension schemes | 55 | 60 |
| No. of active employees included in the calculation | 445 | 437 |
1) Employer’s national insurance contributions are net defined benefit pension liabilities multiplied by the current percentage for employer’s national insurance contributions. Net actuarial gains and losses not recognised on the balance sheet
Pension liabilities
| Beløp i mill. kr. | 31.12.2020 | 31.12.2019 |
|---|---|---|
| Calculated pension liabilities | 974 | 906 |
| Employer’s national insurance contributions | 55 | 52 |
| Pension assets (at market value) | -587 | -540 |
| Net accrued pension liabilities | 441 | 418 |
| Unrecognised effect of estimate deviations | -321 | -310 |
| Net pension liabilities | 120 | 108 |
Financial assumptions:
| 2020 | 2019 | |
|---|---|---|
| Discount rate | 1,50 % | 1,80 % |
| Expected return on fund assets | 2,40 % | 4,20% |
| Expected return on fund assets | 2,00 % | 2,25 % |
| Expected G adjustment | 1,75 % | 2,00 % |
The financial assumptions are based on NRS(V) Pension assumptions (September 2020). Changes in the assumptions from the calculation date to the balance sheet date are deemed not to have a material effect on the accounts.
Common assumptions used within insurance have been used as actuarial assumptions for demographic factors and departures. The calculations are based on the mortality assumptions in K2013.
Unfunded pension schemes and pensions funded through operations
As mentioned in note 2, the company has unfunded pension plans, as well as agreements involving pensions funded through operations with someemployees linked to their leaving the company. The agreements concerning pensions funded through operations provide entitlement to 66 per cent of salary from the age of 67.
| Beløp i mill. kr. | Ufonderte avtaler | Driftspensjon |
|---|---|---|
| Provisions as at 01.01 | 58 | 0,9 |
| New provisions/expenses in the period | 2 | 0,5 |
| Paid out in 2020 | 2 | 0,4 |
| Liabilities as at 31.12 | 58 | 1,0 |
Provisions/expenses in the period were charged in full to the accounts for 2019.
Total pension liabilities
| 2020 | 2019 | |
|---|---|---|
| Unfunded pension plans | 58 | 58 |
| Funded pension plans | 120 | 108 |
| Pensions funded through operations | 1 | 1 |
| Total pension liabilities | 179 | 167 |