Nokia 2004 Annual Report Download - page 147
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Notes to the Consolidated Financial Statements (Continued)
5. Personnel expenses (Continued)
Average personnel
2004 2003 2002
Mobile Phones .............................................. 2,853
Multimedia ................................................. 2,851
Enterprise Solutions .......................................... 2,167
Networks .................................................. 15,463
Common Group Functions ..................................... 30,177
Nokia Group ................................................ 53,511 51,605 52,714
6. Pensions
The most significant pension plans are in Finland and are comprised of the Finnish state TEL
system with benefits directly linked to employee earnings. These benefits are financed in two
distinct portions. The majority of benefits are financed by contributions to a central pool with the
majority of the contributions being used to pay current benefits. The other part comprises
reserved benefits which are pre-funded through the trustee-administered Nokia Pension
Foundation. The pooled portion of the TEL system is accounted for as a defined contribution plan
and the reserved portion as a defined benefit plan. The foreign plans include both defined
contribution and defined benefit plans.
Effective on January 1, 2005, the Finnish TEL system will undergo a reform. The most significant
change that will have an impact on Nokia’s future financial statements is that pensions
accumulated after 2005 are calculated on the earnings during the entire working career, not only
on the basis of the latest few years of employment as provided by the old rules. An increase to the
rate at which pensions accrue has led to a past service cost of EUR 5 million, which will be
recognized over employees’ future working life.
The amounts recognized in the balance sheet relating to single employer defined benefit schemes
are as follows:
2004 2003
Domestic Foreign Domestic Foreign
Plans Plans Plans Plans
EURm EURm EURm EURm
Fair value of plan assets ................................ 768 303 683 204
Present value of funded obligations ....................... (727) (398) (666) (343)
Surplus/(Deficit) ....................................... 41 (95) 17 (139)
Unrecognized net actuarial (gains)/losses ................... 93 82 140 61
Unrecognized past service cost ........................... 5———
Prepaid/(Accrued) pension cost in balance sheet ............. 139 (13) 157 (78)
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