Investor Presentaiton
89
A.P. Moller-Maersk Annual Report 2020
Financials
Consolidated financial statements
Notes index
Note 14 Pensions and similar obligations
Table 14.1
UK
Other
Total
UK
2020
2020
2020
2019
Other
2019
Total
2019
Specification of net liability
Present value of funded plans
2,427
516
2,943
Fair value of plan assets
-2,691
-416
-3,107
2,248
-2,690
490
-388
Net liability of funded plans
-264
100
-164
-442
102
Present value of unfunded plans
156
156
138
2,738
-3,078
-340
138
Impact of minimum funding
requirement/asset ceiling
79
1
80
65
Net liability 31 December
-185
257
72
-377
240
65
-137
Of which:
Pensions, net assets
Pensions and similar obligations
225
297
409
272
Table 14.2
UK
Total
UK
Total
Significant financial assumptions
2020
2020
2019
2019
Discount rate
1.6%
1.7%
1.9%
1.9%
Inflation rate
3.2%
3.0%
3.1%
3.1%
Amounts in USD million =
Table 14.1
As employer, the Group participates in pension plans
according to normal practice in the countries in which the
Group operates. Generally, the pension plans within the
Group are defined contribution plans, where contributions
are recognised in the income statement on an accrual
basis. A number of entities have defined benefit plans, in
which retirement benefits are based on length of service
and salary level. To a limited extent, these defined benefit
plans also include payment of medical expenses, etc.
Pension and medical plans which, as part of collective
bargaining agreements, have been entered into with other
enterprises, known as multi-employer plans, are treated
as other pension plans. Such defined benefit plans are
treated as defined contribution plans when sufficient in-
formation for calculating the individual enterprises' share
of the obligation is not available.
In 2021, the Group expects to pay contributions total-
ling USD 16m to funded defined benefit plans, USD 27m
in 2020.
Table 14.2
The majority of the Group's defined benefit liabilities are
78% in the UK and 12% the US. All of the plans in the
UK and the majority of the plans in the US are funded.
Although all of the UK plans are now closed to new
entrants, active members in the two largest plans con-
tinue to accrue new benefits. The smaller UK plans are
all closed to new accruals, although a salary link remains
in some of the plans.
Overall, the plans have an average duration of 15 years
and approximately 56% of the obligation is in respect of
pensioner members.
As well as being subject to the risks of falling interest
rates, which would increase the obligation, poor asset
returns and pensioners living longer than anticipated,
the Group is also subject to the risk of higher than ex-
pected inflation. This is because many pension benefits,
particularly in the UK plans, increase in line with inflation,
although some minimum and maximum limits apply.View entire presentation