Notes to the Consolidated Financial Statements

21. Pension obligations
           
MEUR 2011 2010
Recognised asset for defined benefit plan at 31 December 14 12
Recognised liability for defined benefit obligations 22 20
Long-service leave and other past service obligations       35 36
Total past service obligations at 31 December 57 56
           
Pension cover is based on the legislation and agreement in force in each country. In Finland, most of the pension obligations are covered by the Employee Pensions system (TyEL). The largest defined benefit plans are used in the Netherlands, Switzerland and Great Britain. Most of these defined benefit pension plans are managed by pension funds, and their assets are not included in the Group's assets. Wärtsilä's subsidiaries make their payments to pension funds in accordance with the local legislation and practice in each country. Authorised actuaries in each country have performed the actuarial calculations required for the defined benefit plans.
           
Long-service leave and other past service obligations are mainly obligations to benefit payments in Italy and France.
           
Movement in defined benefit obligations 2011 2010
Defined benefit obligations at 1 January 315 254
Exchange rate differences 7 32
Current service costs 12 13
Interest cost 10 11
Benefits paid -28 -12
Curtailments and settlements -1 -2
Changes in actuarial gains and losses   14
Plan members and insurer contribution 3  
Impact of acquired and disposed companies and other changes   4
Defined benefit obligations at 31 December 318 315
           
Movement in plan assets 2011 2010
Fair value of plan assets at 1 January 275 227
Exchange rate differences 6 30
Contribution paid to the fund 15 16
Benefits paid by the plan -26 -9
Expected return on plan assets 12 11
Actuarial gains and losses -13  
Recognised fair value of plan assets at 31 December 269 275
           
Unrecognised actuarial gains and losses    
Unrecognised actuarial gains and losses at 1 January -32 -18
Exchange rate differences -1 -2
Curtailments and settlements 1  
Actuarial gains and losses for year - obligations   -13
Actuarial gains and losses for year - plan assets -13  
Impact of acquired/disposed companies and other changes   1
Total -44 -32
Actuarial gains and losses recognised 1  
Unrecognised actuarial gains and losses at 31 December -43 -32
           
Recognised net liability for defined benefit obligations 7 9
           
Expenses recognised in the statement of income 2011 2010
Current service costs 12 13
Interest on obligation 10 11
Expected return on plan assets -12 -11
Actuarial gains and losses 1 1
Gains and losses on curtailments and settlements -1 -2
Defined benefit expenses 11 12
           
Actual return on plan assets -1 10
           
Historical information 2011 2010 2009 2008 2007
Present value of the defined benefit obligation 319 315 254 229 212
Fair value of plan assets -269 -275 -227 -198 -202
Deficit in the plan 50 40 28 31 9
           
Plan assets invested in:       2011 2010
Equity instruments (%) 24 24
Bonds and other financial instruments (%) 45 47
Properties (%) 21 16
Other assets (%) 10 13
           
Actuarial assumptions 2011       Europe Other
Discount rate (%) 2.3–5.5 1.5–12.5
Expected return on plan assets (%) 4.0–7.2 1.9–12.5
Future salary increases (%) 1.0–4.0 3.0–15.0
           
Actuarial assumptions 2010       Europe Other
Discount rate (%) 2.5–5.4 1.5–12.5
Expected return on plan assets (%) 4.0–7.2 1.8–10.5
Future salary increases (%) 1.0–4.0 4.0–15.0
           
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