Boskalis jaarverslagen 2011

24. Employee benefits

The liabilities associated with employee benefits consist of defined benefit pension schemes and other liabilities relating to a number of defined contribution schemes in foreign countries and jubilee benefits. They amount to a total of:

    Note   2011   2010
             
Defined benefit pension schemes   [24.1]   76,386   26,861
Other liabilities on account of employee benefits       7,478   9,035
Employee benefits       83,864   35,896

24.1 Defined benefit pension schemes

    Defined benefit obligation   Fair value plan assets   Surplus/ deficit (-)   Unfunded pension liabilities   Total   Charged to consolidated income statement   Recognized directly in equity
                             
Balance as at
January 1, 2011
  586,570   580,157   -6,413   -9,157   -15,570        
                             
Current service cost   14,687     -14,687   -461   -15,148   -15,148  
Contributions received     25,468   25,468     25,468    
Expected return on plan assets     26,896   26,896     26,896   26,896  
Net actuarial gains / losses   65,949   4,858   -61,091   -214   -61,305     61,305
Benefits paid   -28,304   -28,304     1,257   1,257    
Acquired through business combination   18,500   18,500          
Foreign currency exchange rate changes   1,484   1,608   124   -158   -34    
Total movement   101,090   49,026   -52,064   23   -52,041   -17,427   61,305
                       
Balance as at
December 31, 2011
  687,660   629,183   -58,477   -9,134   -67,611   -17,427   61,305
                             
Limitation on net plan assets as at
January 1
                  -11,291        
Movement in limit on net plan assets                   2,516     -2,516
Limitation on net plan assets as at December 31                   -8,775        
                             
Balance as at
December 31, 2011 after limitation on net plan assets
                  -76,386        
                             
Total result defined benefit pension schemes                   76,216   17,427   58,789

    Defined benefit obligation   Fair value plan assets   Surplus/ deficit (-)   Unfunded pension liabilities   Total   Charged to consolidated income statement   Recognized directly in equity
                             
Balance as at
January 1, 2010
  327,872   327,935   63   -8,288   -8,225        
                             
Current service cost   10,318     -10,318   -790   -11,108   11,108  
Interest cost on obligation   24,289     -24,289   -431   -24,720   24,720  
Contributions received     22,576   22,576     22,576    
Expected return on plan assets     24,372   24,372     24,372   -24,372  
Net actuarial gains / losses   35,936   18,770   -17,166   -289   -17,455     17,455
Benefits paid   -25,170   -25,170     969   969    
Other movements   1,084     -1,084     -1,084    
Acquired through business combination   209,740   209,155   -585   -44   -629    
Foreign currency exchange rate changes   2,501   2,519   18   -284   -266    
Total movement   258,698   252,222   -6,476   -869   -7,345   11,456   17,455
                       
Balance as at
December 31, 2010
  586,570   580,157   -6,413   -9,157   -15,570   11,456   17,455
                             
Limitation on net plan assets as at
January 1
                  -153        
Movement in limit on net plan assets                   -11,138     11,138
Limitation on net plan assets as at
December 31
                  -11,291        
                             
Balance as at
December 31, 2010 after limitation on net plan assets
                  -26,861        
                             
Total result defined benefit pension schemes                   40,049   11,456   28,593

Some of the Dutch staff participate in six multi-employer pension funds. These pension funds qualify under IFRS as defined benefit pension schemes. However, these funds have indicated they are not able to provide sufficient information for a calculation in accordance with IFRS because there is no reliable and consistent basis to attribute the pension obligations, plan assets, income and expenses to the individual member companies of these pension funds. Therefore these pension schemes are treated as defined contribution schemes.

The defined benefit pension schemes that are funded are the company pension funds in the Netherlands, Belgium, the United Kingkom, United States of America, Canada and South Africa. The defined benefit pension schemes that are unfunded are small pension schemes for two German Group companies and Archirodon. The remaining pension schemes in the Group do not qualify as defined benefit pension schemes.

Plan assets consist of the following:

    2011   2010
         
Equities   134,474   140,104
Bonds   462,421   419,317
Real estate   2,136   21,237
Cash (non-interest-bearing)   32,429   3,628
Other receivables and payables   -2,277   -4,129
    629,183   580,157

As per December 31, 2011 and December 31, 2010 the plan assets do not include shares which were issued by Royal Boskalis Westminster N.V.

The recognition of pension costs from defined benefit pension schemes in the consolidated financial statements is presented in the statement below:

    2011   2010
         
Total result defined benefit schemes   76,216   40,049
Pension costs for defined benefit pension schemes charged to the consolidated income statement   -17,427   -11,456
Actuarial gains and losses and asset limitation recognized directly in equity   58,789   28,593
Taxation   -9,537   -5,123
Actuarial gains and losses and asset limitation recognized directly in equity net of tax   49,252   23,470
Actual return on plan assets   31,754   43,142

The accumulated actuarial gains and losses and the balance of the limitation on net plan assets amount to:

    2011   2010
         
Accumulated actuarial gains and losses as per December 31   -113,869   -52,564
Asset limitation on net plan assets as per December 31   -8,775   -11,291
    -122,644   -63,855

The Group expects € 66.5 million in contributions to be paid to the funded defined benefit pension schemes and € 1.2 million in benefits to be paid for the unfunded schemes in 2012.

The expected return on plan assets is the weighted average of actuarially proven expected returns on fixed interest securities and shares based, in part, on external sources. The principal actuarial assumptions used for the calculations are:

    2011   2010
         
Discount rate   4.40% - 6.00%   4.70% - 6.75%
Expected return on plan assets past year   4.00% - 5.50%   4.70% - 5.70%
Expected future salary increases   0.50% - 2.00%   0.50% - 2.00%
Expected future inflation   1.00% - 3.30%   1.00% - 3.40%
Expected future pension increases active participants   1.90% - 3.00%   0.20% - 3.50%
Expected future pension increases inactive participants   0.20% - 2.70%   0.20% - 3.50%

Historical information:

    2011   2010   2009   2008   2007
                     
Defined benefit obligation   -687,660   -586,570   -327,872   -301,853   -314,186
Fair value of plan assets   629,183   580,157   327,935   287,007   345,014
Surplus / deficit (-)   -58,477   -6,413   63   -14,846   30,828
                     
Unfunded pension liabilities   -9,134   -9,157   -8,288   -7,598   -6,931
Total surplus / deficit (-)   -67,611   -15,570   -8,225   -22,444   23,897
                     
Experience adjustments arising on plan liabilities   -10,922   -16,512   -1,264   7,929   -25,747
Experience adjustments arising on plan assets   4,858   18,770   27,081   -56,011   -10,165

Experience adjustments are defined as all gains / losses (-) due to changes other than changes in the discount rate.

 

Added to My report add to My report Source: Annual report 2011, page 96