Employee benefits

TX Group has a range of defined benefit plans in Switzerland. These plans are managed in accordance with the legal requirements and are managed by autonomous, legally independent pension funds. The Board of Trustees, as the highest management body of these pension funds, is composed of an equal number of employee and employer representatives.

The plan participants are insured against the economic consequences of old age, disability and death, with the benefits governed by the respective plan policies on the basis of the contributions paid. Depending on the individual plan, the employer pays contributions of at least 50 per cent up to a maximum of 60 per cent to the pension funds.

The pension funds can change their financing system (contributions and future benefits). In the event of a funding deficit, determined in accordance with the legal requirements of Switzerland, and if other measures are unsuccessful, the pension funds may charge the employer deficit reduction contributions.

All insurance risks are borne by the pension funds. These risks can be broken down into demographic and financial risks, and are regularly assessed by the Board of Trustees, which is also responsible for asset management.

The management of the plan assets aims at securing the insured parties’ benefit entitlements over the long term using the contributions paid by the employees and employer as stipulated in the plan policies. Criteria such as security, the generation of a return on investments that is in line with the market, risk distribution, efficiency and guarantee of the necessary cash and cash equivalents are all taken into account.

Risk capacity, calculated in accordance with recognised rules, is taken into account when determining the investment strategy. The structure of the plan assets takes particular account of the employee benefit obligations, including the plan’s actual financial position and expected changes to the number of insured members. The plan assets are thus distributed across different asset classes, markets and currencies, while ensuring that there is sufficient market liquidity. The target return on plan assets is determined within the context of risk capacity, and should play a key role in financing the benefits promised.

Actuarial assumptions

in per cent	2020	2019
Discount rate as of 1 January	0.30	0.80
Discount rate as of 31 December	0.20	0.30
Expected salary increases	1.00	1.00
Expected pension increases	–	–
Mortality table	BVG2015 GT	BVG2015 GT
Date of most recent actuarial calculation	31.10.2020	31.10.2019

Amounts recognised in the balance sheet

in CHF 000	2020	2019
Employee benefit obligations as of 31 December	(1 838 463)	(1 844 406)
Employee benefit plan assets as of 31 December	1 933 382	1 937 718
Overfunding / (liabilities) as of 31 December	94 919	93 312
Adjustment of asset limit	–	–
Net plan assets / (net plan liabilities) as of 31 December	94 919	93 312
of which net plan assets	137 774	136 310
of which employee benefit obligations	(42 854)	(42 998)

Amounts recognised in the income statement

in CHF 000	2020	2019
Current employer service cost	(35 052)	(31 661)
Past service cost	1 508	407
Effect of plan curtailments / settlements	(375)	1 713
Interest cost for employee benefit obligations	(5 454)	(14 164)
Interest income on plan assets	5 726	14 326
Administration costs (excl. asset management costs)	(920)	(901)
Other effects	(10 216)	–
Company's net periodic pension cost	(44 783)	(30 280)
of which employee benefit expense and administration costs	(45 055)	(30 442)
of which net interest on net plan assets/(net plan liabilities)	272	162

In 2019 and 2020, the past service cost was mainly attributable to plan amendments (lowering of the technical interest rate). The plan amendments relate to various follow-on agreements with collective foundations. Other effects in 2020 are the use of the employer contribution reserve for the TX Group welfare fund to settle compensation for short-time work at a rate of 100 per cent, in the amount of CHF 4.4 million, and the creation of CHF 5.8 million worth of reserves for the funding of various social plans.

Amounts recognised in the statement of comprehensive income

in CHF 000	2020	2019
Actuarial gains / (losses) on employee benefit obligations	(43 742)	(92 632)
Gain on plan assets, excluding interest	63 254	170 504
Total	19 512	77 872

Composition of actuarial gains / (losses)

in CHF 000	2020	2019
Actuarial gains / (losses) through changes in
financial assumptions	(26 568)	(113 526)
demographic assumptions	(35)	–
adjustments due to experience	(17 139)	20 894
Total	(43 742)	(92 632)

Changes in employee benefit obligations

in CHF 000	2020	2019
Present value as of 1 January	(1 844 406)	(1 808 673)
Interest cost	(5 454)	(14 164)
Current employer service cost	(35 052)	(31 661)
Employee contributions	(22 044)	(22 000)
Benefits paid	103 155	112 899
Effect of plan curtailments / settlements	1 508	8 714
Past service cost	–	407
Change in group of consolidated companies	8 492	3 605
Administration costs (excl. asset management costs)	(920)	(901)
Other effects	–	–
Actuarial gains/(losses)	(43 742)	(92 632)
Present value as of 31 December	(1 838 463)	(1 844 406)
of which plan liabilities for current employees	(782 671)	(782 432)
of which plan liabilities for retired employees	(1 055 792)	(1 061 974)

Changes in plan assets

in CHF 000	2020	2019
Fair value as of 1 January	1 937 718	1 829 532
Interest income on plan assets	5 726	14 326
Employer contributions	24 359	24 390
Employee contributions	22 044	22 000
Benefits paid	(103 155)	(112 899)
Effect of plan curtailments/settlements	(375)	(7 001)
Change in group of consolidated companies	(5 972)	(3 134)
Other effects	(10 216)	–
Gain on plan assets, excluding interest	63 254	170 504
Fair value as of 31 December	1 933 382	1 937 718

Allocation of plan assets

in CHF 000	2020	2019
Listed market prices
Cash and cash equivalents	7 485	7 025
Equity securities	646 626	613 766
Bonds	626 994	618 644
Real estate	265 715	325 239
Other	4 701	4 303
Total listed market prices	1 551 521	1 568 977

Non-listed market prices
Real estate	276 419	266 040
Other	105 442	102 701
Total non-listed market prices	381 861	368 741
Total assets at fair value	1 933 382	1 937 718
of which TX Group AG shares	–	–
of which assets used by Group companies	–	–

Expected contributions for the coming year

in CHF 000		2020		2019
Employer contributions		23 725		23 992
Employee contributions		21 175		21 437

Maturity of employee benefit obligations

in years		2020		2019
Weighted average duration of employee benefit obligations in years		14.6		14.6

Sensitivity analysis

in CHF 000	2020	2019
Effects on employee benefit obligations as of 31 December in the event of
Decrease of the discount rate by 0.25%	(69 373)	(69 439)
Increase of discount rate by 0.25%	64 881	64 945
Decrease in salary increases by 0.25%	4 649	4 678
Increase of salary increases by 0.25%	(4 665)	(4 700)
Decrease in life expectancy by 1 year	72 005	69 572
Increase of life expectancy by 1 year	(71 074)	(68 703)

Contributions to defined contribution plans

in CHF 000		2020		2019
Total		641		959

Liabilities to employee benefit funds

in CHF 000	2020	2019
Liabilities to TX Group employee benefit funds	1 060	2 050
Liabilities to other employee benefit funds	–	–
Total	1 060	2 050