28 PENSION OBLIGATIONS

The company has in its operating countries several defined contribution pension plans which are subject to local regulation and practices. The company’s one most significant pension plan is the Finnish Emplyees Pensions Act (TyEL), in which the benefits are determined directly on the basis of the level of the beneficiary’s earnings level. TyEL pension plan is mainly arranged through pension insurance companies and it is treated as a defined contribution plan.

At the end of 2013, the company had defined benefit pension plans in Finland and Norway. All plans at the year-end 2013 were final salary defined benefit plans, and they supplement the statutory pensions or enable retirement before the statutory retirement age. In Norway, some of the company’s defined benefit plans were converted to defined contribution plans during 2013 and all of the plans’ obligations, EUR 12.4 million, were settled. In addition, the company recognised a curtailment gain of EUR 1.9 million, which was booked to other operating income. Three persons left the Finnish plan, which was treated as a partial settlement of the obligation, and it had no effect on the company’s income statement.

EUR 1,000

31 Dec 2013 (forecast) 31 Dec 2013 31 Dec 2012
Recognised in the balance sheet


Present value of funded obligations

595 969 19,032

Fair value of plan assets

-109 -102 -13,816

Total amount recognised in the balance sheet

486 867 5,216


of which in Finland

429 490 384


of which in Norway

57 376 4,832

Estimated amount of defined benefit plan payments in Lemminkäinen Group during 2014 is EUR 0.1 million. Estimates and forecasts may vary from actual figures.

EUR 1,000 Present value of obligation Fair value of plan assets Total
1 Jan 2013
19,032
-13,816 5,216
Current service cost
1,383
1,383
Net interest
393
-226 167
Settlements
-12,434
12,434
Curtailments
-1,933
-1,933



-12,591
12,208 -383
Remeasurements

Return on plan assets
27 27

Change in demographic assumptions 1,101
1,101

Gain/loss from change in financial assumptions -4,479
586 -3,892

Experience gains/losses -554
-554


-3,931
614 -3,318
Exchange differences -1,158
824 -334
Employer contributions
-314 -314
Benefit payments -382
382
31 Dec 2013 969
-102 867







EUR 1,000 Present value of obligation Fair value of plan assets Total
1 Jan 2012 19,694
-13,528 6,165
Current service cost 1,337
1,337
Net interest 618
618
Settlements -951
951
Curtailments -240
-240


764
951 1,715
Remeasurements

Return on plan assets
-473 -473

Gain/loss from change in financial assumptions -77
293 216


-77
-179 -256
Exchange differences 1,029
-704 325
Employer contributions
-1,804 -1,804
Benefit payments -541
541
Business combinations and disposals -1,836
906 -929
31 Dec 2012 19,032
-13,816 5,216

The company's defined benefit pension obligations do not include minimum funding requirements.





31 Dec 2013
Finland
31 Dec 2013
Norway
31 Dec 2012
Finland
31 Dec 2012
Norway
Actuarial assumptions





Discount rate, %
3.3 4.1 3.5 3.3

Inflation rate, %
2.0 1.8 2.0 1.8

Expected rate of salary increases, %
1,0 3.3 3.5 3.8

Future pension increases, %
2.1 0.6 2.1 0.5












Finland Norway
Life expextancy of plan members in 2013





Male age 65 (current life expectancy), years
19.0 20.6

Female age 65 (current life expectancy), years
24.7 23.5

Male age 45 (at age 65), years
20.6 22.8

Female age 45 (at age 65), years
26.4 26.0








Defined benefit plans’ assets consist entirely of qualifying insurance policies and are fair valued on the accounting date. These assets do not include investments to Lemminkäinen or to real estate or other assets used by the company. The expected return on the plan assets is an estimate of a life insurance company's future long term total rebate.


Plan participants at the end of period 31 Dec 2013 31 Dec 2012
Active
12 583
Inactive not in pay status / Deferred 9 15
Inactive in pay status / Pensioners
95 178
Total number of participants
116 776







The effect of a 0.5 percentage point change in the most significant actuarial assumptions to the amount of defined benefit pension obligations is presented in the tables below.






31 Dec 2013
Finland

31 Dec 2013
Norway
0.5% increase in the principal assumption will impact the liability as follows


Discount rate
-4,49% -3,32%

Inflation rate
4,98% -

Expected rate of salary increases
0,17% 0,01%




0.5% decrease in the principal assumption will impact the liability as follows


Discount rate
4,30% 3,32%

Inflation rate
-4,74% -

Expected rate of salary increases
-0,17% -0,01%







The above analyses are based on a 0.5 percentage point change in an assumption while holding all other assumptions constant. When calculating the sensitivity of the defined benefit pension obligation the same method has been applied as when measuring the defined benefit pension obligation recognized in the balance sheet.




2013 2012 2011 2010 2009
Plan assets and liabilities for the past five years

Defined benefit obligation 969 19,032 21,674 21,776 15,941

Fair value of plan assets -102 -13,816 -13,376 -15,961 -12,553


867 5,216 8,298 5,815 3,388