24 Employee benefits

24.1 Employee benefit plan liabilities

The employee benefit plan liabilities of the Group are summarized in the following table. 

24.2 Defined benefit plans

Comet maintains defined benefit pension plans in Switzerland and Germany. These plans differ according to their particular purpose and are based on the legal requirements in the respective countries.

Switzerland

The defined benefit plans are managed within a collective foundation. This is a separate legal entity falling under the Swiss Federal Act on Occupational Retirement, Survivors’ and Disability Pensions (the BVG). The pension fund maintains a main (“base”) plan for employees that provides the legally required benefits, and a supplemental plan that provides benefits in respect of pay components above the statutory range. Both plans are managed under a fully insured pension model and thus, all investment risk is carried by the pension fund, or ultimately by the insurer. The plans are administered by the collective foundation, which is in the form of a foundation organized by an insurance company. The pension fund is managed by the foundation’s board of directors, which is composed of equal numbers of employee and employer representatives and is required to act in the interests of the plan participants.

Plan participants are insured against the financial consequences of old age, disability and death. The benefits are specified in a set of regulations. Minimum levels of benefits are prescribed by law. Contribution levels are set as a percentage of the insured portion of employees’ pay. The retirement benefit is calculated as the retirement pension asset existing at the time of retirement, multiplied by the conversion rate specified in the regulations. Plan participants can opt to receive their principal as a lump sum instead of drawing a pension. The supplemental plan as a rule pays out a lump sum. The amounts of the disability and survivor pensions are defined as a percentage of insured pay.

Germany

In Germany there is a closed plan with pension commitments which no longer has active participants. The obligations in respect of current pension payments and deferred pensions are recognized in the balance sheet.

Movement in present value of defined benefit obligation, in plan assets and in net carrying amount for defined benefit plans

The actuarial gain arising from changes in financial assumptions was mainly attributable to the increase in the discount rate and, as an offsetting effect, the increase in expected salary increases.

The actuarial loss arising from experience adjustments represents the change that is not attributable to changes in assumptions. This relates in particular to the difference between the actuarial assumptions in the prior year and the actual outcomes with regard to the entry and exit of insured employees, effective salary adjustments, death and disability of insured persons, and retirements.

The board of directors of the pension fund decided in April 2022 to further reduce the pension conversion rates with effect from the year 2024. Under IAS 19, these plan amendments led to a negative past service cost (i.e., they resulted in income) and a corresponding reduction in the defined benefit obligation with a positive pre-tax effect of CHF 0.6 million. 

The board of directors of the pension fund decided in March 2021 to reduce the pension conversion rates with effect from the year 2022 and 2023. Under IAS 19, these plan amendments led to a negative past service cost (i.e., they resulted in income) and a corresponding reduc­tion in the defined benefit obligation with a positive pre-tax effect of CHF 0.5 million.

The average duration of the defined benefit obligation was 9.7 years.

The employer contributions to the plans in Switzerland for fiscal year 2023 are expected to amount to CHF 3.4 million.

As the base plan and the supplemental plan are managed under a fully insured model, all investment risk is carried by the pension fund, or ultimately by the insurer. The plan assets are therefore reported as the item “assets from insurance contract”.

Companies of the Group do not make loans to the pension plans and do not utilize any real estate held by the plans.

Sensitivities

The following table presents an analysis of how the reported present value of the defined benefit obligation would change in response to hypothetical changes in the actuarial assumptions.

24.3 Defined contribution plans

The contributions paid to defined contribution plans in the fiscal year amounted to CHF 7.7 million (prior year: CHF 6.8 million).

24.4 Length-of-service awards

Comet grants length-of-service awards to its employees after a certain number of years of service, in the form of lump-sum payments that increase in amount with the number of years of employment. The provision for this item changed as follows in the year under review: