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5.2 PENSIONS AND OTHER LONG-TERM EMPLOYEE BENEFITS
The Group companies provide various retirement plans in accordance with local regulations and practices in the
countries in which they operate.
The majority of the Group’s pension plans are defined contribution plans, whereby the company’s obligation is
limited to annual contributions to the employees’ pension plans. The Group also has a few, remaining defined
benefit pension plans with net pension obligation. Costs related to these plans account for less than 15 per cent
of total pension costs in 2021.
Summary of pension costs
(NOK million) 2021 2020
Pension costs defined contribution plans and other severance schemes 174 162
Pension costs defined benefit plans 18 14
Total pension costs recognised in the income statement, ref. Note 2.2 192 177
Actuarial gain / loss (-) recognised in other comprehensive income (net of tax) -8 -13
The Group has defined benefit plans in a limited number of countries, including Norway, the UK, Greece, Turkey,
Indonesia and in certain countries in South East Asia and the Middle East. In Norway, the defined benefit schemes
were replaced by defined contribution plans in 2004, and the defined benefit plan in the UK was closed for new
members in 2012.
Defined benefit plans in Norway and Indonesia account for around 67 per cent and 27 per cent, respectively, of
the Group’s net pension obligation as of 31 December 2021. In Norway, net pension obligations are primarily
related to previous early retirement schemes for the Group’s senior executives. In certain countries in South East
Asia and the Middle East, such as Indonesia, Thailand and Oman, there are pension schemes based on a final salary
principle in accordance with local regulations. These are included in net pension obligations.
Other severance schemes comprise mainly obligations related to operating pension schemes for employees in
the Norwegian companies with an annual basic salary and pension base exceeding 12 times the basic amount (G).
This accounts for 83 per cent of the other severance scheme obligation.
Actuarial assumptions
Norway Indonesia
2021 2020 2021 2020
Discount rate in % 1.1 1.0 7,3 7.4
Expected return in % 1.1 1.0 3.75 4.0
Wage adjustment in % 3.50 2.0 6.0 6.0
Inflation / increase in social security basic amount (G) in % 2.25 1.8 3.1 2.6
Pension adjustment in % 1.1-2.5 0.0-2.0 - -
Schemes with net pension obligations
Pension plan
assets
Defined benefit
obligations
Net pension
obligations
(NOK million) 2021 2020 2021 2020 2021 2020
Balance as of 1 January 471 440 -611 -575 -140 -135
Translation difference at the beginning of the period 12 2 -12 - - 2
Recognised in the income statement
Pension earnings for the year - - -12 -11 -12 -11
Interest income / cost (-) - - -13 -13 -13 -13
Expected return on pension plan assets 7 9 - - 7 9
Recognised in the income statement 7 9 -25 -23 -18 -14
Other movements -37 20 25 -13 -12 8
Net pension obligation defined benefit plans 453 471 -624 -611 -171 -140
Other severance schemes - - -125 -103 -125 -103
Balance as of 31 December 453 471 -749 -715 -296 -243
Breakdown of net pension liabilities in funded and unfunded schemes
(NOK million) 31.12.2021 31.12.2020
Present value of funded pension obligations -491 -504
Pension plan assets 453 471
Net funded pension obligations -38 -33
Present value of unfunded pension obligations -257 -211
Capitalised net pension assets / liabilities (-) -296 -243
Pension plan assets
Pension plan assets are mainly in bonds and shares. The estimated return will vary depending on the composition of
the various classes of assets. Contributions to pension plan assets during 2022 are expected to be approximately
NOK 6.3 million.
Breakdown of pension plan assets (fair value)
31.12.2021 31.12.2020
Cash and cash equivalents in % 4.3 0.4
Bonds in % 74.8 54.7
Shares in % 15.6 40.6
Property in % 5.3 4.3
Total pension plan assets 100.0 100.0
Jotun Group
40 I Jotun Annual Report 2021