At 31 December 2021, the part at more than one year of provisions for employee benefits broke down as follows:
| (in € millions) | Note | 31/12/2021 | 31/12/2020 (*) |
|---|---|---|---|
| Provisions for retirement benefit obligations | Provisions for retirement benefit obligations Note 29.1 |
Provisions for retirement benefit obligations 31/12/20211,357 |
Provisions for retirement benefit obligations 31/12/2020 (*)1,430 |
| Long-term employee benefits | Long-term employee benefits Note 29.2 |
Long-term employee benefits 31/12/2021102 |
Long-term employee benefits 31/12/2020 (*)105 |
| (in € millions)Total provisions for employee benefits | Note
|
31/12/20211,459 | 31/12/2020 (*)1,535 |
(*) Adjusted as at 1 January 2020 following the IFRS IC’s agenda decision of May 2021 clarifying how to calculate retirement benefit obligations (see Note A.2.1, “Basis for preparing the financial statements”).
Provisions are taken on the liabilities side of the consolidated balance sheet for obligations connected with defined benefit retirement plans for both current and former employees (people who have retired and those with deferred rights). These provisions are determined using the projected unit credit method on the basis of actuarial valuations made at each annual balance sheet date. The actuarial assumptions used to determine the obligations vary depending on the economic conditions of the country or monetary zone in which the plan is operated. Each plan’s obligations are recognised separately.
Under IAS 19, for defined benefit plans financed under external management arrangements (i.e. pension funds or insurance policies), the surplus or shortfall of the fair value of the assets compared with the present value of the obligations is recognised as an asset or liability in the consolidated balance sheet. That recognition is subject to asset ceiling rules and minimum funding requirements set out in IFRIC 14.
The expense recognised under operating income or loss in each period comprises the current service cost and the effects of any change, reduction or winding up of the plan. The accretion impact recognised on actuarial liabilities and interest income on plan assets are recognised under other financial income and expenses. Interest income from plan assets is calculated using the discount rate used to calculate obligations with respect to defined benefit plans.
The impacts of remeasuring net liabilities relating to defined benefit pension plans are recorded under other comprehensive income.
They comprise the following:
At 31 December 2021, provisions for retirement benefit obligations comprised provisions for lump sums on retirement and provisions with respect to obligations for supplementary retirement benefits.
| (in € millions) | 31/12/2021 | 31/12/2020 |
|---|---|---|
| At more than one year | At more than one year 31/12/20211,357 |
At more than one year 31/12/2020 1,430 |
| At less than one year (**) | At less than one year (**)31/12/202151 |
At less than one year (**)31/12/2020 60 |
| (in € millions)Total provisions for retirement benefit obligations |
31/12/20211,408 | 31/12/2020 1,490 |
(*) Adjusted as at 1 January 2020 following the IFRS IC’s agenda decision of May 2021 clarifying how to calculate retirement benefit obligations (see Note A.2.1, “Basis for preparing the financial statements”).
(**) The part of provisions for retirement benefit obligations that matures within less than one year is shown under “Other current liabilities”.
The VINCI Group’s main supplementary retirement benefit obligations relate to defined benefit plans, which have the following characteristics:
Some plans, of which several Group executives are members, are pre-financed through two insurance policies taken out with Cardif and one policy taken out with Allianz. These policies involve active management with reference to composite indexes, and aim to achieve a good balance between the expected return on investments and the associated risks. Sufficient liquidity, in view of the timescale of plan liabilities, is maintained so that pensions and other one-off payments can be met. These plans are closed to new members.
In the UK, defined benefit plans for certain Group employees and former employees give rise to benefits that are mainly based on final salaries. They also provide benefits in the event of death and disability. These plans are closed to new members.
At 31 December 2021, 6,382 individuals, including 3,191 retirees, were covered by the plans. The average duration of the plans is 19 years.
The investment strategy for plan assets is defined by the trustees representing the pension funds. Contribution schedules and the plan’s level of funding are determined by the employer and the trustee, based on three-yearly actuarial valuations. Contribution schedules are intended to cover future service costs and any deficit arising from vested rights.
