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 65 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	2021	2020
Discount rate as of 1 January	0.20	0.30
Discount rate as of 31 December	0.30	0.20
Expected salary increases	1.00	1.00
Expected pension increases	–	–
Mortality table	BVG2020 GT	BVG2015 GT
Date of most recent actuarial calculation	31.10.2021	31.10.2020

Amounts recognised in the balance sheet

in CHF 000	2021	2020
Employee benefit obligations as of 31 December	(1 661 787)	(1 838 463)
Employee benefit plan assets as of 31 December	1 982 395	1 933 382
Overfunding/(liabilities) as of 31 December	320 608	94 919
Adjustment of asset limit	–	–
Net plan assets/(net plan liabilities) as of 31 December	320 608	94 919
of which net plan assets	348 095	137 774
of which employee benefit obligations	(27 486)	(42 855)

Amounts recognised in the income statement

in CHF 000	2021	2020
Current employer service cost	(34 720)	(35 052)
Past service cost	3 203	1 508
Effect of plan curtailments / settlements	(510)	(375)
Interest cost for employee benefit obligations	(3 619)	(5 454)
Interest income on plan assets	3 808	5 726
Administration costs (excl. asset management costs)	(918)	(920)
Other effects	773	(10 216)
Company's net periodic pension cost	(31 983)	(44 783)
of which employee benefit expense and administration costs	(32 172)	(45 055)
of which net interest on net plan assets/(net plan liabilities)	189	272

In 2020 and 2021, 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 2021 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 0.9 million, and the creation of CHF 4.8 million worth of reserves for the funding of various social plans.

Amounts recognised in the statement of comprehensive income

in CHF 000	2021	2020
Actuarial gains / (losses) on employee benefit obligations	102 012	(43 742)
Gain on plan assets, excluding interest	133 072	63 254
Total	235 084	19 512

Composition of actuarial gains/(losses)

in CHF 000	2021	2020
Actuarial gains / (losses) through changes in financial assumptions	20 871	(26 568)
Demographical assumptions	77 815	(35)
Adjustments due to experience	3 326	(17 139)
Total	102 012	(43 742)

Actuarial gains were very high in 2021. The main reasons for this are the impact of the change in financial assumptions (CHF 20.8 million) and changes in demographic assumptions (CHF 77.8 million), with the latter due to application of the latest generation tables (BVG2020 GT).

Changes in employee benefit obligations

in CHF 000	2021	2020
Present value as of 1 January	(1 838 463)	(1 844 406)
Interest cost	(3 619)	(5 454)
Current employer service cost	(34 720)	(35 052)
Employee contributions	(20 728)	(22 044)
Benefits paid	91 819	103 155
Effect of plan curtailments/settlements	3 203	1 508
Change in group of consolidated companies	39 627	8 492
Administration costs (excl. asset management costs)	(918)	(920)
Actuarial gains/(losses)	102 012	(43 742)
Present value as of 31 December	(1 661 787)	(1 838 463)
of which plan liabilities for current employees	(694 422)	(782 671)
of which plan liabilities for retired employees	(967 365)	(1 055 792)

Changes in plan assets

in CHF 000	2021	2020
Market value as of 1 January	1 933 382	1 937 717
Interest income on plan assets	3 808	5 726
Employer contributions	22 667	24 359
Employee contributions	20 728	22 044
Benefits paid	(91 819)	(103 155)
Effect of plan curtailments/settlements	(510)	(375)
Change in group of consolidated companies	(38 980)	(5 972)
Other effects	47	(10 216)
Gain on plan assets, excluding interest	133 072	63 254
Market value as of 31 December	1 982 395	1 933 382

Allocation of plan assets

in CHF 000	2021	2020
Listed market prices
Cash and cash equivalents	14 154	7 485
Shares	713 226	646 626
Bonds	629 010	626 994
Real estate	273 326	265 715
Other	1 499	4 701
Total listed market prices	1 631 215	1 551 521

Non-listed market prices
Real estate	291 172	276 419
Other	60 008	105 442
Total non-listed market prices	351 180	381 861
Total assets at fair value	1 982 395	1 933 382
of which shares of TX Group AG	–	–
of which assets used by Group companies	–	–

Expected contributions for the coming year

in CHF 000		2021		2020
Employer contributions		20 100		23 725
Employee contributions		18 238		21 175

Maturity of employee benefit obligations

in years		2021		2020
Weighted average duration of employee benefit obligations in years		13.4		14.6

Sensitivity analysis

in CHF 000	2021	2020
Effects on employee benefit obligations as of 31 December in the event of
Decrease in the discount rate by 0.25%	(57 336)	(69 373)
Increase of discount rate by 0.25%	53 826	64 881
Decrease in salary increases by 0.25%	3 637	4 649
Increase of salary by 0.25%	(3 639)	(4 665)
Decrease in life expectancy by 1 year	69 215	72 005
Increase of life expectancy by 1 year	(68 301)	(71 074)

Contributions to defined contribution plans

in CHF 000		2021		2020
Total		1 174		641

Liabilities to employee benefit funds

in CHF 000	2021	2020
Liabilities to TX Group employee benefit funds	64	1 060
Trade accounts payable to third parties	966	–
Total	1 030	1 060