Note 16 – Pension liabilities

Norsk Tipping AS has both funded (financed by notional assets in the Norwegian Public Service Pension Fund (SPK)) and unfunded pension plans. The funded pension plans are administered by SPK, see the detailed description of the arrangement below. The unfunded pension plans involve retirement pension agreements with current and former holders of executive positions with salaries above 12G, as well as two other pension agreements for former senior employees.

The company has also on occasion entered into supplementary agreements concerning pensions funded through operations with some employees who left following organisational changes.

Norwegian Public Service Pension Fund (SPK)
Description of the arrangement:
Norsk Tipping AS has a group pension scheme for its employees in the Norwegian Public Service Pension Fund (SPK). The pension scheme provides benefits in line with the Norwegian Public Service Pension Fund Act. The benefits cover retirement, disability, spouse, and child pensions. In addition, the calculation applies to benefits from the age of 62 under the early retirement arrangement (AFP) for public sector employees. The pension benefits are coordinated with the national insurance scheme’s benefits. The company’s premium contributions are expensed under payroll and personnel expenses as they are incurred.

Premiums are set and pension liabilities calculated based on actuarial principles as part of the SPK arrangement. The arrangement is not fund based, rather it is based on the simulated administration of pension assets (‘notional assets’) as if the assets were invested in government bonds. Pension payments are guaranteed by the state (section 1 of the Norwegian Public Service Pension Fund Act). The pension scheme cannot be moved in the same way as a private pension scheme and this calculation assumes that the arrangement will be continued by SPK. The simulation is based on the bonds being held until maturity. The pension assets are therefore valued at their book value.

1) Employer’s national insurance contributions are net defined benefit pension liabilities multiplied by the current percentage for employer’s national insurance contributions. Net actuarial gains and losses not recognised on the balance sheet include employer’s national insurance contributions.

The financial assumptions are based on NRS(V) Pension assumptions (September 2019). Changes in the assumptions from the calculation date to the balance sheet date are deemed not to have a material effect on the accounts.

Common assumptions used within insurance have been used as actuarial assumptions for demographic factors and departures. The calculations are based on the mortality assumptions in K2013.

As mentioned in note 2, the company has unfunded pension plans, as well as agreements involving pensions funded through operations with some employees linked to their leaving the company. The agreements concerning pensions funded through operations provide entitlement to 66 per cent of salary from the age of 67.

Provisions/expenses in the period were charged in full to the accounts for 2019.