AddLife sponsors pension plans in the countries in which it has activities. Pension plans can be defined contribution or defined benefit plans or a combination of both. AddLife has defined benefit pension plans mainly in Sweden. In these plans, a pension is determined mainly by the salary received at the time of retirement. Subsidiaries in other countries in the Group mainly have defined contribution pension plans.
| Obligations for employee benefits, defined benefit pension plans | ||||
|---|---|---|---|---|
| Pension liability as per balance sheet | 2023-12-31 | 2022-12-31 | ||
| Pension liability PRI | 60 | 56 | ||
| Other pension obligations | 4 | 4 | ||
| Total defined benefit pension plans | 64 | 60 | ||
| Obligations for defined benefits and the value of plan assets | 2023-12-31 | 2022-12-31 | ||
| Funded obligations: | ||||
| Present value of funded defined benefit obligations | 1 | 1 | ||
| Fair value of plan assets | -1 | -1 | ||
| Net debt, funded obligations | 0 | 0 | ||
| Present value of unfunded defined benefit obligations | 64 | 60 | ||
| Net amount in the balance sheet (obligation +, asset –) | 64 | 60 | ||
| Pension obligations and plan assets by country: | ||||
| Sweden | ||||
| Pension obligations | 60 | 56 | ||
| Net amount in Sweden | 60 | 56 | ||
| Germany | ||||
| Pension obligations | 4 | 4 | ||
| Net amount in German | 4 | 4 | ||
| Austria | ||||
| Pension obligations | 1 | 1 | ||
| Plan assets | -1 | -1 | ||
| Net amount in Austria | 0 | 0 | ||
| Net amount in the balance sheet (obligation +, asset –) | 64 | 60 | ||
| Reconciliation of net amount for pensions in the balance sheet | 2023-12-31 | 2022-12-31 | ||
| Opening balance | 60 | 82 | ||
| Change in accounting for pensions | 2 | 0 | ||
| Payment of pension benefits | -3 | -2 | ||
| Translation effects | – | 0 | ||
| Revaluations | 5 | -20 | ||
| Net amount in the balance sheet (obligation +, asset –) | 64 | 60 | ||
| Changes in the obligation for defined benefit plans recognised in the balance sheet | 2023-12-31 | 2022-12-31 | ||
| Opening balance | 60 | 82 | ||
| Pensions earned during the period | -0 | -1 | ||
| Interest on obligations | 2 | 1 | ||
| Benefits paid | -3 | -2 | ||
| Revaluations: | ||||
| Gain (–)/loss (+) resulting from financial assumptions | 4 | -25 | ||
| Experienced-based gains (–)/losses (+) | 1 | 5 | ||
| Present value of pension obligations | 64 | 60 | ||
| Pension costs | 2023 | 2022 | ||
| Defined benefit plans | ||||
| Cost for pensions earned during the year | 1 | 3 | ||
| Interest on obligations | 2 | 1 | ||
| Total cost of defined benefit plans | 3 | 4 | ||
| Total cost of defined contribution plans | 90 | 80 | ||
| Social security costs on pension costs | 11 | 10 | ||
| Total cost of benefits after termination of employment | 104 | 94 | ||
| Allocation of pension costs in the income statement | 2022 | 2022 | ||
| Cost of goods sold | 22 | 17 | ||
| Selling and administrative expenses | 80 | 76 | ||
| Net financial items | 2 | 1 | ||
| Total pension costs | 104 | 94 | ||
| 2023 | 2022 | |||
| Actuarial assumptions | Sweden | Sweden | ||
| The following material actuarial assumptions were applied in calculating obligations: | ||||
| Discount rate 1 January, % | 3.7 | 1.8 | ||
| Discount rate 31 December, % | 3.3 | 3.7 | ||
| Future salary increases, % | 2.6 | 3.0 | ||
| Future increases in pensions (change in income base amount), % | 2.1 | 2.5 | ||
| Employee turnover, % | 10.0 | 10.0 | ||
| Mortality table | DUS23 | DUS 21 | ||
| 2023 | 2022 | |||
| Actuarial assumptions | Sweden | Sweden | ||
| Discount rate increases by 0.5% | -5 | -4 | ||
| Discount rate decreases by 0.5% | 5 | 5 | ||
| Expected life expectancy increases by 1 year | 3 | 3 | ||
| The total number of commitments included in pension liabilities is distributed as follows: | ||||
| Comprising | 2023-12-31 | 2022-12-31 | ||
| Active | 0 | 13 | ||
| Disability pensioners | 0 | 0 | ||
| Paid-up policyholders | 97 | 84 | ||
| Pensioners | 88 | 87 | ||
| The total number of commitments included in pension liabilities | 185 | 184 | ||
Defined contributrion plans
These plans are mainly retirement pension plans, disability pensions and family pensions. Premiums are paid on an ongoing basis during the year by each company to separate legal entities, such as insurance companies. The size of the premium is based on the salary. The pension cost for the period is included in profit or loss. The Group has no further obligations related to the defined contribution plans.
Obligations for retirement pensions and family pensions for salaried employees in Sweden are secured by insurance in Alecta. According to statement UFR 10 of the Swedish Financial Reporting Board, this is a defined benefit plan covering multiple employers. In the event that Alecta is unable to provide sufficient information to determine an individual company's share of the total liability and its plan assets, these pension plans are reported as defined contribution. For the 2023 financial year, the Company did not have access to information enabling it to report this plan as a defined benefit plan. Thus the pension plan according to ITP and secured by insurance in Alecta is recognised as a defined-contribution plan. The year's fees for pension insurance with Alecta totalled SEK 11 million (11). The fees for the next financial year are assessed to be in line with this year's fees. The collective consolidation rate for Alecta in December 2023 was 157 percent (172).
Defined benefit plans
AddLife has defined benefit pension plans mainly in Sweden and cover a small number of employees. Under defined benefit pension plans,the Group bears the risk for payment of promised benefits. These pension plans primarily comprise retirement pensions. In Sweden, the defined benefit pension plans are unfunded.
The pension cost and pension obligation for defined benefit pension plans are calculated using the Projected Unit Credit Method. This method distributes the cost of pensions at the rate at which employees perform services for the Company that increase their rights to future benefits. The aim is to expense expected future pension payouts in a manner that provides an even cost over the employee's period of employment. This calculation takes into account anticipated future salary increases and anticipated inflation. The Company's obligation is calculated annually by independent actuaries. The discount rate used is equivalent to the interest rate on high-quality corporate bonds or mortgage-backed bonds with a maturity equivalent to the average maturity of the obligation and currency. For Swedish pension liabilities, the interest rate for Swedish housing bonds is used as a basis.
Tax on returns is reported in the income statement for the period the tax refers to and is thus not included in the calculation of debt. The portion of payroll tax calculated based on the Pension Obligations Vesting Act (Tryggandelagen) for a legal entity is recognized, for simplicity, as accrued expenses instead of as part of the net obligation.
Tax on returns is reported in the income statement for the period the tax refers to and is thus not included in the calculation of debt. In the case of unfunded plans, the tax is charged to the year's profit. When there is a difference between how the pension cost is determined in the legal entity and the group, a provision or claim is reported for taxes that are paid on pension costs, e.g. special payroll tax for Swedish companies based on this difference. The present value of the provision or receivable is not calculated.