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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 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