Menu

29. Employee benefits

The employee benefit plans of the Group are based on legal requirements in the respective countries. Beyond these regulatory requirements, the Group provides meals, housing, education and access to medical care according to the local operating group’s policy.

The Group’s contribution to defined contribution plans amounted to EUR 0.2 million in 2020 (2019: EUR 0.7 million). Precious Woods Tropical Gabon Industrie S.A. has transferred all employees to Compagnie des Placages de la Lowé S.A. and its defined contribution plans with them.

The pension plan for employees in Switzerland is a defined benefit plan and covers the risks of age, death and disability. Financing occurs by means of employer and employee contributions, defined in the pension fund rules in terms of an age-related sliding scale of percentages of salary, as well as returns from the investments made by the pension fund. The pension fund guarantees the vested benefit amount as confirmed annually to members, as regulated by Swiss law. Interests may be added to member balances at the discretion of the Board of Trustees. At retirement date, members have the right to take their retirement benefit as a lump sum or as an annuity. No curtailment or settlement has occurred during the year. As of the beginning of 2020, the pension solution of Precious Woods Holding Ltd. was transferred from the Bâloise Collective Foundation for Occupational Benefits to the AXA Occupational Benefits Foundation. The conversion rates for the new foundation are higher than before. This resulted in past service costs from plan change of EUR 144 174 and is recognized in P&L. No curtailment or settlement has occurred during the year.

Changes in the present value of the defined benefit obligation
in thousand EUR   2020   2019
Defined benefit obligation at 1 January   4 593   3 801
Current service costs   376   307
Interest costs   12   35
Contribution by plan participants   86   97
Actuarial losses/(gains)   33   196
Benefits paid/transferred   239   –2
Past service costs   144  
Currency effects   3   159
31 December   5 486   4 593
Plans wholly or partly funded   5 486   4 593
Plans wholly unfunded    
Movement in the fair value of the plan assets
in thousand EUR   2020   2019
Opening fair value of plan assets   2 717   2 380
Interest income   7   23
Return on plan assets excluding interest income   340   –54
Contributions by the employers   200   177
Contributions by plan participants   86   97
Benefits paid/transferred   239   –2
Currency effects   –2   96
31 December   3 587   2 717
in thousand EUR   2020   2019
Present value of obligations   5 486   4 593
Fair value of plan assets   3 587   2 717
Net liability   1 899   1 876
Changes in net liability
in thousand EUR   2020   2019
Opening net liability   1 876   1 421
Pension cost recognized in profit or loss   524   319
Pension cost recognized in other comprehensive income   –306   250
Employer contributions   –200   –177
Currency effects   5   63
Recognized in balance sheet   1 899   1 876

Amounts recognized in profit or loss in respect of the defined benefit plan are as follows:

in thousand EUR   2020   2019
Current service costs   376   307
Net interest costs   4   12
Past service costs   144  
Recognized in profit or loss   524   319

Amounts recognized in other comprehensive income in respect of the defined benefit plan are as follows:

in thousand EUR   2020   2019
Return of plan assets excluding interest income   340   –54
Changes in assumptions   –165   –336
Experience adjustments   131   140
Recognized in other comprehensive income   306   –250
Principal actuarial assumptions used
    2020   2019
Expected employer contributions   212 063   178 861
Discount rates   0.15%   0.25%
Expected salary increases   1.00%   1.00%
Expected long-term increase of pensions   0.00%   0.00%
Sensitivity to changes in the principal assumptions
in thousand EUR   DBO   Effect
Actuarial assumption 31 December 2020   5 486    
Discount rate +0.25%   5 258   –4.2%
Discount rate –0.25%   5 730   4.4%
Salary increase rate +0.25%   5 510   0.4%
Salary increase rate –0.25%   5 463   –0.4%
in thousand EUR   DBO   Effect
Actuarial assumption 31 December 2019   4 593    
Discount rate +0.5%   4 179   –9.00%
Discount rate –0.5%   5 070   10.40%
Salary increase rate +0.5%   4 638   1.00%
Salary increase rate –0.5%   4 550   –0.90%
Accounting policies

The Group has both defined benefit plans and defined contribution plans.

The obligation and costs of pension benefits are determined using the projected unit credit method. The projected unit credit method considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past service costs, which comprise plan amendments and curtailments, as well as gains or losses on the settlement of pension benefits are recognized immediately when they occur. Remeasurements, which comprise actuarial gains and losses on the pension obligation, the return on plan assets and changes in the effect of the asset ceiling excluding amounts included in net interest, are recognized directly in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The pension obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to the interest rate on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.