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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