Employee benefits
|
| | | | | | | | |
| December 31, 2017 | | December 31, 2016 | | December 31, 2015 |
Salaries | 3,761,171 |
| | 3,662,180 |
| | 2,833,741 |
|
Pension costs | 378,588 |
| | 342,805 |
| | 282,517 |
|
Other social benefits | 277,468 |
| | 301,537 |
| | 191,079 |
|
Share based payments costs | 354,851 |
| | 290,783 |
| | 311,671 |
|
Recruitment costs | 125,731 |
| | 391,035 |
| | — |
|
Other personnel expenditures | (26,439 | ) | | 40,827 |
| | 24,557 |
|
Total employee benefits | 4,871,370 |
| | 5,029,167 |
| | 3,643,565 |
|
| | | | | |
Benefit plans
The Company participates in a retirement plan (the “Plan”) organized as an independent collective foundation, that covers all of its employees in Switzerland, including management. The collective foundation is governed by a foundation board. The board is made up of an equal number of employee and employer representatives of the affiliated companies. The Company has no direct influence on the investment strategy of the collective foundation. Moreover, certain elements of the employee benefits are defined in the same way for all affiliated companies. This is mainly related to the annuity factors at retirement and to interest allocated on retirement savings. The employer itself cannot determine the benefits or how they are financed directly. The foundation board of the collective foundation is responsible for the determination of the investment strategy, for making changes to the pension fund regulations and in particular, also for defining the financing of the pension benefits.
The old age benefits are based on retirement savings for each employee, coupled with annual retirement credits and interest (there is no possibility to credit negative interest). At retirement age, the insured members can choose whether to take a pension for life, which includes a spouse’s pension, or a lump sum. In addition to retirement benefits, the plan benefits also include disability and death benefits. Insured members may also buy into the scheme to improve their pension provision up to the maximum amount permitted under the rules of the plan and may withdraw funds early for the purchase of a residential property for their own use subject to limitations under Swiss law. On leaving the Company, retirement savings are transferred to the pension institution of the new employer or to a vested benefits institution. This type of benefit may result in pension payments varying considerably between individual years. In defining the benefits, the minimum requirements of the Swiss Law on Occupational Retirement, Survivors and Disability Pension Plans (BVG) and its implementing provisions must be observed. The BVG defines the minimum pensionable salary and the minimum retirement credits. In Switzerland, the minimum interest rate applicable to these minimum retirement savings is set by the Swiss Federal Council at least once every two years. The rate was 1.75% in 2015, 1.25% in 2016 and 1.00% in 2017.
The assets are invested by the collective foundation in a diversified portfolio that respects the requirements of the Swiss BVG. Under the Plan, both the Company and the employee share the costs equally. The structure of the plan and the legal provisions of the BVG mean that the employer is exposed to actuarial risks. The main risks are investment risk, interest risk, disability risk and the risk of longevity. Through the affiliation to a collective foundation, the Company has minimized these risks, since they are shared between a much greater number of participants.
The following tables present information about the net defined benefit liability and its components:
Change in defined benefit obligation
|
| | | | | |
| 2017 | | 2016 |
Defined benefit obligation at January 1 | 7,122,841 |
| | 5,427,776 |
|
Service costs | 348,172 |
| | 319,173 |
|
Plan participants' contribution | 236,074 |
| | 218,275 |
|
Interest cost | 50,494 |
| | 62,916 |
|
Actuarial losses | 60,781 |
| | 417,937 |
|
Transfer-out amounts | (440,950 | ) | | (1,276,315 | ) |
Transfer-in amounts of new employees | 622,205 |
| | 1,953,079 |
|
Defined benefit obligation at December 31 | 7,999,617 |
| | 7,122,841 |
|
| | | |
The defined benefit obligation includes only liabilities for active employees. The weighted average modified duration of the defined benefit obligation at December 31, 2017 is 20.9 years (2016: 21.7 years).
Change in fair value of plan assets
|
| | | | | |
| 2017 | | 2016 |
Fair value of plan assets at January 1 | 5,030,407 |
| | 3,851,943 |
|
Interest income | 37,500 |
| | 47,994 |
|
Return on plan assets excluding interest income | 332,759 |
| | 23,835 |
|
Employer contributions | 236,074 |
| | 220,306 |
|
Plan participants' contributions | 236,074 |
| | 218,275 |
|
Transfer-out amounts | (440,950 | ) | | (1,276,315 | ) |
Transfer-in amounts of new employees | 622,205 |
| | 1,953,079 |
|
Administration expense | (17,422 | ) | | (8,710 | ) |
Fair value of plan assets at December 31 | 6,036,647 |
| | 5,030,407 |
|
| | | |
Net defined benefit liability recognized in the statement of financial position
|
| | | | | |
| December 31, 2017 | | December 31, 2016 |
Present value of funded defined benefit obligation | 7,999,617 |
| | 7,122,841 |
|
Fair value of plan assets | (6,036,647 | ) | | (5,030,407 | ) |
Net defined benefit liability | 1,962,970 |
| | 2,092,434 |
|
| | | |
Defined Benefit Cost
|
| | | | | | | | |
| 2017 | | 2016 | | 2015 |
Service cost | 348,172 |
| | 319,173 |
| | 261,778 |
|
Net interest expense | 12,994 |
| | 14,922 |
| | 14,873 |
|
Administration expense | 17,422 |
| | 8,710 |
| | 5,866 |
|
Total defined costs for the year recognized in profit or loss | 378,588 |
| | 342,805 |
| | 282,517 |
|
| | | | | |
Remeasurement of the Defined Benefit Liability
|
| | | | | | | | |
| 2017 | | 2016 | | 2015 |
Actuarial loss (gain) arising from changes in financial assumptions | (150,552 | ) | | 412,396 |
| | (167,623 | ) |
Actuarial loss arising from experience adjustments | 211,331 |
| | 264,417 |
| | 175,375 |
|
Actuarial gain arising from demographic assumptions | — |
| | (258,876 | ) | | — |
|
Return on plan assets excluding interest income | (332,759 | ) | | (23,835 | ) | | 46,164 |
|
Total defined benefit cost for the year recognized in the other comprehensive loss | (271,980 | ) | | 394,102 |
| | 53,916 |
|
| | | | | |
Assumptions
|
| | | | | | | | |
At December 31 | 2017 | | 2016 | | 2015 |
Discount rate | 0.80 | % | | 0.70 | % | | 1.10 | % |
Future salary increase | 1.10 | % | | 1.10 | % | | 1.10 | % |
Pension indexation | 0.00 | % | | 0.00 | % | | 0.00 | % |
Mortality and disability rates | BVG2015G |
| | BVG2015G |
| | BVG 2010G |
|
| | | | | |
Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.
|
| | | | | |
December 31, | 2017 | | 2016 |
Change in assumption | 0.25 % increase |
| | 0.25 % increase |
|
Discount rate | (354,477 | ) | | (324,057 | ) |
Salary increase | 49,707 |
| | 42,181 |
|
Pension indexation | 189,965 |
| | 201,221 |
|
Change in assumption | + 1 year |
| | + 1 year |
|
Life expectancy | 182,977 |
| | 167,161 |
|
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