content_image/250314.jpg
## SECTION 7.4 Retirement benefit obligations and similar obligations 

## EXPECTED MATURITY AND DURATION 

Retirement benefit obligations are primarily expected to mature after 5 years. The non- discounted maturity is: 

## MATURITY OF PENSION OBLIGATIONS 

<img src='content_image/250314.jpg'>

The expected duration of the obligations at year-end 2013 was 20 years, comprising active employees at 26 years and retired employees at 15 years. 

The duration is calculated using a weighted average of the duration compared to the benefit obligation. 

## 7.4  SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS 

When calculating the value of the Group’s defined benefit plans, a number of sig- nificant actuarial assumptions are made, including discount rates, expected return on plan assets, expected growth in wages and salaries, mortality and retirement benefits. The range and weighted average for these assumptions are disclosed in the table. 

The value of the Group’s defined benefit plans is based on valuations from external actuaries. 

The actuarial assumptions underlying the calculations and valuations vary from country to country due to local economic conditions and labour market conditions. 

The present value of the net obligation is calculated based on the expected long- term interest rate in each country, where available, based on long-term govern- ment bonds. 

Mortality assumptions are based on the Group entity’s best estimate of the mortal- ity of plan members during and after em- ployment, and include expected changes in mortality, for example using estimates of mortality improvements. Due to the broad range of entities comprising the retirement benefit obligation, several different mortal- ity tables are used to calculate the future retirement benefit obligation. 

## 7.4 ACCOUNTING POLICIES 

A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Contributions to defined contribution plans are recognised in the income statement in the period during which services are rendered by employees. Any contributions outstanding are recognised in the state- ment of financial position as other liabilities. 

A defined benefit plan is a post-employment bene- fit plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefits that employ- ees have earned in return for their service in the current and previous years. The future benefits are discounted to determine the present value. The calculation is performed annually by a qualified actuary. 

The present value is determined on the basis of as- sumptions about the future development in variables such as salary levels, interest rates, inflation and mor- tality. The actuarial present value less the fair value of any plan assets is recognised in the statement of financial position under retirement benefit obligations. 

Pension costs for the year are recognised in the income statement based on actuarial estimates and financial expectations at the beginning of the year. Any difference between the expected development in pension assets and liabilities and realised amounts at year-end are designated as actuarial gains or losses and recognised in other comprehensive income. 

If changes in benefits relating to services rendered by employees in previous years result in changes in the actuarial present value, the changes are recognised as historical costs. Historical costs are recognised imme- diately, provided employees have already earned the changed benefits. If employees have not earned the benefits, the historical costs are recognised in the in- come statement over the period in which the changed benefits are earned by the employees. 

If a retirement benefit plan constitutes a net asset, the asset is only recognised if it offsets future refunds from the plan or will lead to reduced future payments to the plan. 

Interest on retirement benefit obligations and the expected return on plan assets are recognised under financial income or financial expenses. 

Realised gains and losses on the adjustment of retire- ment benefit obligations as a result of large-scale termination of jobs in connection with restructurings are recognised in the income statement under special items. 

Realised gains and losses on the curtailment or settle- ment of retirement benefit plans are recognised in the income statement under staff costs. 

