20. Pension obligations
2017 2016
Pension liability/receivable in balance sheet
Defined benefit plans 26.4 21.6
Other long-term employee benefits 1.1 1.1
Pension liability (+)/receivable (-) in balance sheet 27.5 22.7
The Group’s defined benefit plans consist of the pension liability for the former CEO of the parent company which is unfunded and the Swedish pension programme which is funded. The company’s pension commitment in respect of the defined benefit relating to the former CEO was EUR 2.8 million on 31 December 2017. The remaining pension liability relates to the Swedish pension programme. Through its defined benefit plans the Group is exposed to a number of risks such as changes in discount rate, salary increases, inflation and life expectancy.
The defined benefit plan in Sweden is the ITP2 plan and it is based on final salary. HKScan has a pension foundation in Sweden to secure obligations relating to retirement pensions for white-collar workers in accordance with the ITP2 plan. Only new white-collar employees born before, or in 1979 have the possibility to choose the ITP2 solution. Pension foundation has employer and employee representatives in the board. The plan assets are invested in various funds in accordance with a distribution that is determined by the foundation's Board of Directors. Swedish companies can secure new pension obligations through pension insurance, balance-sheet provisions or pension-fund contributions. A credit insurance policy must be taken out for the value of the obligations. Special pension tax is applicable for the pension plan in Sweden.
Summary of provision for post-employment benefits, defined benefit plans 2017 2016
Obligations -103.5 -104.5
Fair value of plan assets 84.6 89.4
Special pension tax -4.6 -3.7
Net provision for funded post-employment benefits -23.6 -18.7
Provision for unfunded post-employment benefits -2.8 -2.8
Total provision for post-employment benefits, defined benefit plans -26.4 -21.5
Pension costs in the income statement 2017 2016
Current year service costs -1.2 -1.0
Interest costs -2.6 -3.2
Interest income 2.0 2.8
Special pension tax -0.4 -0.3
Pension costs for defined benefit plans -2.2 -1.7
Pension costs for defined contribution plans -28.4 -28.6
Total pension costs for the period -30.5 -30.3
Pension costs in other comprehensive income 2017 2016
Changes in actuarial assumptions -3.2 -2.9
Special pension tax -0.8 -0.7
Income tax effect 0.9 0.8
Total pension costs in other comprehensive income after taxes -3.1 -2.9
The following information is about the funded defined benefit plan the Group has in Sweden:
Obligations 2017 2016
Obligations opening balance -104.5 -108.7
Current year service costs -1.2 -1.0
Interest costs -2.6 -3.2
Remeasurements:
Effect of changes in financial assumptions -1.3 -1.2
Effect of experience adjustments -3.0 -0.2
Exchange rate translation 3.4 4.1
Benefits paid 5.6 5.7
Obligations closing balance -103.5 -104.5
Fair value of plan assets 2017 2016
Plan assets opening balance 89.4 97.0
Interest income 2.0 2.8
Remeasurements (experience adjustments) 1.0 -1.4
Exchange rate translation -2.6 -3.7
Settlement paid -5.1 -5.1
Plan assets closing balance 84.6 89.4
Assumptions applied for actuarial calculations, % 2017 2016
Discount rate 2.30 2.25
Expected salary increase 2.25 2.25
Inflation 1.8 1.5
Personnel turnover rate 4 4
Life expentancy DUS 14 DUS 14
Plan assets by category % 2017 2016
Interest funds 65 69
Equity instrument funds 35 30
Private equity funds - 1
Sensitivity analysis 2017, effect on obligation (+decrease/-increase), EUR million Change Used
value
Change
Discount rate -0.25% 2.30% 0.25%
-3.7 -103.5 3.5
Salary increase -0.25% 2.25% 0.25%
0.6 -103.5 -0.6
Inflation -0.25% 1.80% 0.25%
3.0 -103.5 -3.2
Life expectancy -1 year DUS 14 1 year
4.4 -103.5 -4.5
Average duration of the obligation is 14 years.