Pension Costs Rise for Jyske Bank
21 August 2012 (PLANSPONSOREurope.com) - Higher numbers of retirees as well as a low interest rate has meant the money with which Jyske Bank set aside to pay pensions has increased along with pension expenses, a spokesperson for the Danish bank told PLANSPONSOR Europe.
The Danish bank’s half-yearly interim financial report reveals provisions for pensions increased to DKK 461m in H1 from DKK 438m in H2 2011, while pension expenses rose to DKK 164m in H1 from DKK 144m in the second half of last year.
A spokesperson for the bank told PLANSPONSOR Europe: “With pension expenses, we make calculations on a quarterly basis to reassess our pension expenditures. That of course depends on the turnover of the portfolio from quarter to quarter. There might be some seasonality in that or there might be changes from quarter to quarter, depending on the number of employees entering into a pension. If I look at the development in the last quarter, we had a lot of people retiring, which led to slightly higher expenditures than we had last year.
“The reason for provision for pensions ticking upwards is related to several things. We reassess the provisions dependant on turnover of employees, the composition of employees relative to their age. We look at the actual interest rate we need to discount these pension liabilities, with so, all in all the primary reason for the increase is the slightly lower interest rate level which leads to a higher present value of our pension liabilities.”