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 . Share-based 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 share-based 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 share-based 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 share-based 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 share-based 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