In the reporting period, total expenses for pensions in the amount of CHF 10.2 million have been recognized as employee expenses and interest expenses (2022: CHF 11.9 million). Some employees participate in defined contribution plans whose insurance benefit results solely from the paid contributions and the return on investment on the plan asset. The other employees participate in defined benefit plans that are based upon direct benefits of the Autoneum Group.

The expenses for defined contribution plans totaled CHF 6.1 million in the current reporting period (2022: CHF 5.8 million).

Autoneum maintains defined benefit pension plans in Switzerland, the USA, Canada, Great Britain, France and the Netherlands. The most significant pension plans are those in Switzerland and the USA. Those plans sum up to 80.6% (December 31, 2022: 78.3%) of the Group’s defined benefit obligation and 80.9% (December 31, 2022: 79.8%) of the Group’s plan assets.

The status of the defined benefit plans at year-end was as follows:

Pension plans are governed by the Swiss Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG). The Group’s pension plans are administered by separate legal foundations, which are funded by regular employee and company contributions. Plan participants are insured against the financial consequences of old age, disability and death. The most senior governing body of the pension plan is the Board of Trustees. The Board of Trustees is responsible for the investment of the plan assets. All investment decisions made by the Board of Trustees need to conform to the guidelines set out in a long-term investment strategy. This strategy is based on legal requirements, expected future contributions and expected future obligations and is reassessed at least once a year. All governing and administration bodies have an obligation to act in the interests of the plan participants. The final benefit is contribution-based with certain minimum guarantees. Due to these minimum guarantees, the Swiss plans are treated as defined benefit plans for the purposes of these IFRS financial statements, although they have many characteristics of defined contribution plans. Retirement benefits are based on the accumulated savings capital, which can either be drawn as a lifelong pension or as a lump-sum payment. The pension is calculated by multiplying the balance of the savings capital with the applicable conversion rate. The plan is exposed to actuarial risks, such as longevity risk (underlying mortality table BVG 2020), interest rate risk and market (investment) risk. In case of underfunding, the Board of Trustees is required to take the necessary measures to ensure that full funding can be expected to be restored within a reasonable period. The measures may include increasing employee and company contributions, lowering the interest rate on retirement account balances or reducing prospective benefits.

Autoneum maintains five defined benefit pension plans in the USA. Four of those plans are funded and one plan is unfunded. The defined benefit plans in the USA have been closed to new members. New employees in the USA join defined contribution plans. In addition, Autoneum participates in one multi-employer defined benefit plan subject to a collective bargaining agreement between the union and the employer. The rate of contributions are governed by the collective bargaining agreement and the fund met the minimum funding requirements of Employee Retirement Income Security Act of 1974 (ERISA).

Under the standard withdrawal liability process, an employer is subject to a withdrawal liability based on its allocation percentage multiplied by the unfunded vested benefit. An employer can be liable for other entities’ obligations if a mass withdrawal occurs. By providing benefits to certain union-represented employees, the plan would qualify as a defined benefit plan. However, as sufficient information on the asset base, the pension portfolio and the allocation of plan assets are not available, Autoneum accounts for it as a defined contribution plan. The audited financial statements of the plan were prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). As of January 1, 2023 the plan had assets of USD 356.2 million (January 1, 2022: USD 417.0 million) and accrued liabilities (immediate gains method) of USD 575.6 million (January 1, 2022: USD 580.0 million). In the period under review, Autoneum contributed USD 1.0 million to the plan. In 2022, Autoneum contributed USD 0.9 million (5%) to the plan, whereas the total contributions of all participating employers together were USD 19.5 million. The expected contributions to the plan for 2024 are USD 1.3 million. Although this plan is in an underfunded status, Autoneum currently has no obligation.

Autoneum maintains defined benefit plans in Canada, Great Britain, France and the Netherlands. The pension plan in Canada is closed to new members. The plan is funded, and the majority of the contributions are paid by the employer. The pension plan in Great Britain is funded and has been closed to new members. New employees join a defined contribution plan. The plan in France is unfunded and settled by the employer while the plan in the Netherlands is funded and has been closed to new members.

The movement in the defined benefit obligation for all pension plans over the year was as follows:

The movement in the fair value of plan assets for all pension plans over the year was as follows:

The major categories of plan assets were as follows:

All equity and debt instruments are listed on a stock exchange.

The amounts recognized in profit or loss were as follows:

The amounts recognized in profit or loss result from plans in the following regions:

The expected employer contributions for the Group’s defined benefit pension plans for 2024 amount to CHF 3.7 million. The expected benefit payments for 2024 are CHF 5.8 million.

The effect from remeasurement of the defined benefit pension plans recognized in other comprehensive income is as follows:

The table below discloses the main actuarial assumptions at year-end:

At December 31, 2023 the weighted average duration of the defined benefit obligation was 14.0 years (December 31, 2022: 13.5 years).

The table below shows the results of the sensitivity analysis. It was analyzed how expected changes in the discount rate, in future salary and pension growth, and in the life expectancy would impact the defined benefit obligation. Changes in these parameters would have the following effect on the defined benefit obligation: