16 Employee Benefits

Employee Benefit liabilities
In CHF million  
  30.06.2012 31.12.2011
Employee benefit liabilities consist of
gross defined benefit liabilities
  1 150 1 173
other long-term employee benefit liabilities
  0 0
other employee benefit liabilities
  62 88
Total employee benefit liabilities
  1 212 1 261

Defined benefit plans

In September 2010, the Swiss Life Group announced an amendment of the terms of two major defined benefit plans in Switzerland. The amendments mainly relate to old age pension benefits that changed from benefit-oriented to contribution-oriented, changes in the level of certain long-term death and disability benefits, and a reduction in benefits for early retirements. In January 2011, CHF 684 million in cash was transferred from the Swiss Life Group to these defined benefit plans. The investment risks are now borne by the plan participants themselves whereas mortality and disability risks are still reinsured with the Swiss Life Group.

Amounts recognised as Employee Benefit assets/Liabilities
In CHF million  
  30.06.2012 31.12.2011
Present value of defined benefit obligation
  –2 585 –2 646
Fair value of plan assets
  1 133 1 059
Unrecognised actuarial gains (–)/losses (+)
  431 547
Net defined benefit asset (+)/liability (–)
  –1 021 –1 040
The net defined benefit asset/liability consists of
gross defined benefit liabilities
  –1 150 –1 173
gross defined benefit assets
  129 133
Amount of insurance contracts not included in plan assets
  1 360 1 393

Amounts recognised as defined benefit Expense
In CHF million  
  2012 HY 2011 HY
Current service cost
  39 36
Interest cost
  35 35
Expected return on plan assets
  –19 –17
Net actuarial gains (–)/losses (+)
  16 4
Employee contributions
  –13 –14
Total defined benefit expense
  58 44

Due to the decrease in the weighted average discount rate used to discount the defined benefit obligation, the net unrecognised actuarial losses increased from CHF 284 million at 31.12.2010 to CHF 547 million at 31.12.2011. Unrecognised actuarial gains and losses which exceed 10% of the greater of the present value of the defined benefit obligation and the fair value of plan assets at the end of the previous reporting period are recognised in profit or loss over the expected average remaining working lives of the employees participating in the plans (‘corridor method’). The application of the ‘corridor method’ led to an increase of actuarial losses recognised in profit or loss in the period under review.


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