Veidekke ASA: New pension scheme gives positive effect on results in 4th quarter
Veidekke ASA is planning a change in the pension scheme for Norwegian employees under 57 years of age. A final decision is expected from the Veidekke board in December. This involves a shift from defined benefit to a defined contribution plan, and the change will result in an accounting gain of up to NOK 190 million in the 4th quarter.
There will be a profit/loss account in connection with the termination of the old scheme. Preliminary estimates show an accounting gain of up to NOK 190 million. Employees who are transferred to the new scheme will be issued paid-up policies for previously earned benefits. Progress towards the chosen solution has been done in close cooperation with the company's representatives. The new scheme will have contribution rates of 5% of salary up to 6 G and 8% of salary up to 12 G.
The change comes as a result of an expected change in the rules for occupational pension schemes and the introduction of new accounting rules for defined benefit pension schemes, which come into force on 1 January 2013.
The new scheme provides financial certainty for the company. The accounting standard requires that pension obligations be recorded at fair value. Preliminary calculations show that Veidekke must scale down its equity by NOK 300 million in the 1st quarter of 2013 in connection with the introduction of the new rules.
For more information, please contact:
Executive Vice President and CFO, Jørgen Wiese Porsmyr, tel. +47 21 05 76 44 / +47 90 75 90 58,
Financial director, Jørgen Michelet, tel. +47 21 05 77 22 / +47 91 74 38 56, email@example.com
Executive Vice president, Communication, Kai Krüger Henriksen, tel. +47 21 05 77 04 / +47 90 51 93 60, firstname.lastname@example.org
Veidekke is one of Scandinavia's leading contractors and property developers with a turnover of 18 billion (2011) and 6,500 employees. Activities include building and construction projects, residential developments, asphalt plants, gravel and aggregates and road maintenance. Our values are professional, honest, enthusiastic and pioneering. Our goals for health, safety and the environment, HSE, have equal status with our financial goals. Veidekke is characterised by a strong corporate culture with employee involvement and co-ownership as important cornerstones. More than half of the employees are co-owners, holding around 20% of the Group's shares between them. The company is listed on the Oslo Stock Exchange and has never declared a loss since it was founded in 1936.