2.23 Employee retirement benefit schemes

Group companies’ retirement benefit schemes are included in the consolidated financial statements according to the legal provisions in effect in the corresponding country. The actual financial impact of pension plans on the Group is calculated as of the balance sheet date. Any financial benefit is carried as an asset if it is used for the company’s future pension expenses. A financial commitment is carried as a liability if the requirements for the creation of a provision are met. Any freely available employer’s contribution reserves are recognised as an asset.

The Group’s Swiss subsidiaries have legally independent retirement benefit schemes funded by the employer’s and the employees’ contributions. The financial consequences for the Group of pension fund surpluses and deficits as well as changes in any employer’s contribution reserves are recorded in the income statement as personnel expenditure alongside deferred contributions for the period. Any surpluses or deficits are calculated based on the pension fund’s provisional annual financial statements prepared according to Swiss GAAP FER 26.

The foreign pension funds have either become independent or they are not significant. Certain foreign subsidiaries have pension plans without independent assets and include the corresponding pension provision directly in the balance sheet. Pension provisions are calculated according to nationally recognised methods and changes are recorded in the income statement as personnel expenditure.