Emplo y ee benefts IAS 19 The Group oper ates or participates in a number of defned beneft and defned contribution pension and other lon g term emplo y ee beneft plans Other plans primarily relate to healthcare benefts A defned contribution plan is a pension plan under which the Group pa ys fx ed contributions into a separ ate entit y The Group has no le gal or cons tructiv e obligations to pa y further contributions if the fund does not hold sufcient assets to pa y all emplo y ees the benefts relatin g to emplo y ee ser vice in the current and prior periods Contributions are recogniz ed as e xpenses when the y fall due for pa yment Other pension plans are defned beneft plans Calculations for the defned beneft plans that e xis t within Securit as are carried out b y independent actuaries Cos ts for defned beneft plans are es timated usin g the projected unit credit method in a w a y that dis tributes the cos t o v er the emplo y ee s w orkin g life Obligations are v alued at the present v alue of the e xpected future cash fo ws usin g a discount r ate corre spondin g to the interes t r ate on hig h qualit y corpor ate bonds or g o v ernment bonds with a remainin g term that is appro ximately the same as the obliga tions f urther information re gar din g the determination of the discount r ate is pro vided in note 31 Plan assets are measured at fair v alue The e xpected return on plan assets is determined as a w eig hted a v er a g e of the e xpected lon g term return for each of the asset cate g ories in each plan The return on equit y related ins truments is determined b y addin g a risk premium to a risk free return based on the yield of g o v ernment bonds The return on bonds is based on the yield of g o v ernment and corpor ate bonds in accor dance with each plan s holdin g of these ins truments When it is virtually cert ain that another part y will reimbur se some or all of the e xpenditure required to set tle a defned beneft obligation the rig ht to reimbur sement is recogniz ed This reimbur sement rig ht is measured at fair v alue and classifed as a lon g term receiv able The Group has adopted the amendment to IAS 19 Emplo y ee Benefts re gar din g the principle for recognizin g gains and losses resultin g from chan g es in actuarial assumptions plan e xperience and in v es tment per for mance diferin g from that assumed Actuarial gains and losses r e l a t i n g t o pos t emplo yment beneft plans a n d r e i m b u r s e ment rig hts are recogniz ed in other comprehensiv e income in the period which the y occur on the line actuarial gains and losses and efects of minimum fundin g requirement net of t ax Actuarial gains and losses relatin g to other lon g term emplo y ee beneft plans are recogniz ed immediately in the s t atement of income If accountin g for a defned beneft plan results in a balance sheet asset this is reported as a net asset in the consolidated balance sheet under other lon g term receiv ables Other wise it is reported as a pro vision under pro visions for pensions and similar commitments Cos ts related to defned beneft plans includin g the interes t element as w ell as e xpected return on plan assets are recogniz ed in oper atin g income Pro visions for pensions and similar commit ments are not included in net debt Sharebased pa yments IFRS 2 IFRS 2 requires that fair v alue of the equit y set tled schemes should be accounted for as an e xpense in the s t atement of income with the corre spondin g entr y accounted for as equit y The e xpense should be accrued on a linear basis o v er the v es tin g period f or cash set tled schemes I f RS 2 also requires that the fair v alue of the scheme should be recogniz ed as an e xpense in the s t atement of income on a linear basis o v er the v es tin g period but with the correspondin g entr y recogniz ed as a liabilit y r ather than as equit y F urthermore if the incentiv e scheme lapses without set tlement this will result in a re v er sal of the accrued cos t for cash set tled schemes only F or equit y set tled schemes no re v er sal will occur after the v es tin g date since no adjus tment to the net assets is required Securit as has a sharebased incentiv e scheme where the participants in the scheme receiv e a bonus where t w o thir ds are pa y able in cash in the be g innin g of the y ear after the bonus has been accrued The remainin g one thir d of the bonus is used to acquire shares at mark et v alue These shares are deliv ered to the participants in the be g innin g of the y ear after the y ha v e been acquired if the participants s till are emplo y ed b y Securit as The cos t for Securit as includin g social securit y e xpenses is accounted for in the s t atement of income durin g the v es tin g period Ho w e v er the sharebased portion of the bonus is classifed as equit y and not as a liabilit y At the end of the progr am a re v aluation is made of the orig inal es timates and the fnal outcome of social securit y e xpenses is determined An y de viation due to the re v aluation for e xample due to an y participant lea vin g the Group and not receivin g allocated shares is accounted for in the s t atement of income Correspondin g adjus tments are made to ret ained earnin g s in equit y up until the v es tin g date In or der to hed g e the share portion of Securit as sharebased incentiv e scheme 2011 the Group has entered into a s w ap a greement with a thir d part y The s w ap a greement represents an obligation for the Parent Com pan y to purchase its o wn shares at a predetermined price The s w ap a gree ment is consequently classifed as an equit y ins trument and accounted for in equit y as a reduction of ret ained earnin g s A s w ap a greement w as also entered into to hed g e the share portion of Securit as sharebased incentiv e scheme 2010 This s w ap a greement has set tled durin g 2012 in con junc tion with the deliv er y of the shares to the participants upon v es tin g Pro visions IAS 37 Pro visions are recogniz ed when the Group has a present obligation as a result of a pas t e v ent and it is more probable than not that an outfo w of resources embodyin g economic benefts will be required to set tle the obli gation and a reliable es timate can be made of the amount of the obligation Pro visions for res tructurin g are recogniz ed when a det ailed formal plan for measures has been es t ablished and v alid e xpect ations ha v e been r aised b y those afected b y the measures No pro visions are recogniz ed for future oper atin g losses Claims reser v es are calculated on the basis of a combination of case reser v es which represent claims reported and IBNR incurred but not reported reser v es Actuarial calculations are per formed quarterly to assess the adequac y of the reser v es based on open claims and his torical IBNR 81 Annual R eport Notes and comments to the consolidated fnancial s t atements Securit as Annual R eport 2012